"We have agreed to a fair price for our shareholders and have found a way forward for this national interest project", said Steve Kean, chief executive officer of Kinder Morgan Canada and its parent, Kinder Morgan Inc (NYSE:KMI - News). If Canada buys the pipeline, it will also acquire the personnel needed to continue with construction.
Canada will buy Kinder Morgan Canada's Trans Mountain oil pipeline and its controversial expansion project for C$4.5 billion ($3.5 billion) in a bid to ensure it gets built amid fierce opposition.
"It must be built and it will be built", Finance Minister Bill Morneau.
Pressed about why the federal government's $4.5-billion price tag was so much lower than Kinder Morgan's stated $7.4-billion project value, Morneau said Ottawa was purchasing all the relevant assets - but he studiously avoided saying whether construction would increase costs.
But British Columbia's social democratic government recently joined environmental activists' fight against the 1,150-kilometer (15-mile) pipeline, provoking a trade row with Alberta and leading Kinder Morgan to temporarily halt its construction until the dispute was resolved.
"Make no mistake: this is an investment in Canada's future". "We said we would meet the deadline". Canada has the world's third largest oil reserves but 99 percent of its exports now go to refiners in the USA, where limits on pipeline and refinery capacity mean Canadian oil sells at a discount.
"We've always reckoned that the Trans Mountain expansion was logical in terms of, if you build the pipeline, the volumes will flow through it". The plan includes the existing pipeline that's been in operation since 1953.
But he added in a statement that the association is "deeply concerned" that the government felt it had to purchase the project "to assert federal jurisdiction" and allow it to be built.
Now 99 percent of Canada's oil is sold to the United States at a discount, and access to the Pacific coast is seen as key to diversifying the world's sixth largest oil producer's energy exports.
The company had ceased all non-essential spending on the Trans Mountain expansion in April, vowing to cancel it unless it received assurances it can proceed without delays and without undue risk to shareholders by a deadline of this Thursday.
Trudeau approved the expansion, arguing that it was "economically necessary" and enabled him to overcome opposition to a carbon tax plan that will help Canada cut its greenhouse emissions.
But Morneau said the Alberta-British Columbia feud - which led Alberta to boycott British Columbia wines and threaten to cut the neighboring provinces fuel supplies - "cannot be allowed to fester".
More than 200 people, including two members of Parliament, have been arrested already at Kinder Morgan's oil tanker and terminal site in Burnaby, British Columbia.
The B.C. government is carrying on with its reference case against the Trans Mountain pipeline expansion, Premier John Horgan told Prime Minister Justin Trudeau in an early-morning phone call Tuesday. "This project has more certainty than ever before".
"We believe this is the best way to protect thousands of well-paying jobs and the safest and most effective way to get our resources to world markets", Morneau told a news conference in Ottawa after the meeting.