The company behind a proposed pipeline expansion that would carry oil sands bitumen to British Columbia’s Lower Mainland asked the Alberta government to help finance the project – a request that was rebuffed this week.
Kinder Morgan Inc. made the request last year in “high-level” talks with the province about its proposed Trans Mountain pipeline expansion, a provincial spokesman confirmed to The Globe and Mail. Alberta Energy Minister Diana McQueen this week told Kinder Morgan the province would not be backing the project.
“We are not moving forward with any financial arrangements with Kinder Morgan,” Ms. McQueen’s spokesman, Mike Feenstra, said in an e-mail, confirming “ideas were shared with the Alberta Government by Kinder Morgan about project financing options” in talks last year.
Lisa Clement, a spokeswoman for Kinder Morgan, said Wednesday and Thursday the company was not able to comment on the request to the provincial government, including whether the project is viable without government funding and how much money the company sought.
Alberta has been aggressively pressing for the approval of new or expanded pipelines, including Trans Mountain, Enbridge Inc.’s Northern Gateway and TransCanada Corp.’s Keystone XL, and has in the past subsidized other energy sector projects – in particular, a bitumen upgrader being built outside Edmonton.
In this case, Premier Alison Redford’s government – which this week tabled its budget – balked at co-financing a project at a time when the province is borrowing billions and as pipelines are under immense regulatory and public scrutiny.
The talks between the province and Kinder Morgan didn’t progress far enough for Kinder Morgan to specify what kind of financial support it was seeking, he added.
Through its “Bitumen Royalty in Kind” program, or BRIK, the Alberta government has supported the Sturgeon Refinery project, a bitumen upgrader that’s under construction. Costs for the project have ballooned – to $8.5-billion – leading the province to step in with a $300-million loan in December of last year.
A spokesman for TransCanada said the company has never sought any form of financing from the province for Keystone XL, though government officials have regularly travelled to Washington to lobby for the project’s approval. An Enbridge spokesman said the company also had not sought financial support from Alberta.
Kinder Morgan applied in December to the National Energy Board (NEB) to expand its existing Trans Mountain line, a 1,150-kilometre route between the Edmonton area and Burnaby, B.C. The $5.4-billion expansion would increase the pipeline’s capacity from 300,000 barrels per day to 890,000 barrels per day. If approved, the twinned pipeline would carry both light and heavy oil, including diluted bitumen from the Alberta oil sands.
The project faces opposition from environmental groups and First Nations leaders, while the mayors of Burnaby and Vancouver both oppose the project.
An estimated 2,300 people have applied to speak at NEB hearings on the proposed expansion, including more than 40 First Nations groups.Report Typo/Error