Canada Liberal govt to buy Trans Mountain pipeline

Morneau suggested that a toll paid by oil companies could cover some additional costs.

This announcement which followed an agreement between Kinder Morgan and Natural Resources Minister Jim Carr came just two days before a deadline of May 31 set by Kinder Morgan.

According to a statement issued by Steve Kean, chairman and CEO of Kinder Morgan the deal represented the best way forward for shareholders and Canadians to “realize the great national economic benefits promised by that project.”

Kinder Morgan had estimated the cost of building the expansion would be $7.4 billion.

But Morneau said the government did not intend to own it for a long time and at the appropriate time, it will work with investors to transfer the project and related assets to a new owner or owners.

He added that investors such as Indigenous groups and pension funds have already expressed interest, he said.

Until then, it would be owned by Crown corporation

The agreement, which must still be approved by Kinder Morgan's shareholders, is expected to close in August.

The pipeline expansion project had faced intense opposition from the B.C. government, environmental activists and Indigenous groups.

Carr said the plan would not sacrifice the environment for the economic benefits.

"Canadians want both and we can have both," he said and added,

Alberta Premier Rachel Notley called it "a major step forward for all Canadians."

Prime Minister Justin Trudeau also took to Twitter to praise the deal.

"Today, we've taken action to create and protect jobs in Alberta and B.C., and restart construction on the TMX pipeline expansion, a vital project in the national interest," his post says.

The expansion would be a linking of the existing 1,150-kilometre pipeline between Strathcona County (near Edmonton), Alberta and Burnaby, BC.

(Reporting by Asha Bajaj)

Image:  Bill Morneau/Facebook