MPs Kennedy Stewart and Elizabeth May were arrested during a Trans Mountain Expansion protest
Kinder Morgan says it has already spent $1.1 billion since 2013 on Trans Mountain Expansion
Kinder Morgan Canada Limited (TSX: KML) is suspending all “non-essential activities and related spending” on the Trans Mountain Expansion pipeline project, citing opposition from the BC NDP government of John Horgan, and “will not commit additional shareholder resources” raised from last year’s initial public offering.
The company made the announcement Sunday afternoon.
It says it will consult with “stakeholders” in an effort to reach agreements by May 31 on the project’s ability to build in BC and “adequate protection” of Kinder Morgan Canada shareholders.
“A company cannot resolve differences between governments. While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments,” said CEO Steve Kean.
“As KML has repeatedly stated, we will be judicious in our use of shareholder funds. In keeping with that commitment, we have determined that in the current environment, we will not put KML shareholders at risk on the remaining project spend.”
Kean says Kinder Morgan Canada is a very good midstream energy company with limited debt, but management is not prepared to gamble with the company’s future.
“The uncertainty as to whether we will be able to finish what we start leads us to the conclusion that we should protect the value that KML has, rather than risking billions of dollars on an outcome that is outside of our control,” Kean said.
“To date, we have spent considerable resources bringing the Project to this point and recognize the vital economic importance of the Project to Canada. Therefore, in the coming weeks we will work with stakeholders on potential ways to continue advancing the Project consistent with the two principles previously stated.”
Trans Mountain has spent $1.1 billionCDN (about half of which has been spent since the Kinder Morgan Canada IPO).
“While we are prepared to accept the many risks traditionally presented by large construction projects, extraordinary political risks that are completely outside of our control and that could prevent completion of the project are risks to which we simply cannot expose our shareholders,” said Kean in a press release.