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A aerial view of the Trans Mountain tank farm in Burnaby, B.C.JONATHAN HAYWARD/CP

It was a Saturday. Jim Carr was in New York at an energy conference when he was told a call was being organized with Kinder Morgan chief executive Steven Kean, and the president of its Canadian subsidiary, Ian Anderson.

“It was obviously important, because they don’t have a habit of calling on the weekend,” Mr. Carr said.

That’s when the Natural Resources Minister got the word: The company was giving the Canadian government 24-hours notice that it was issuing a news release warning it would abandon the Trans Mountain pipeline expansion if it couldn’t clear away the political risk from the B.C. government’s vow to try to block the project.

“And they wanted to know what the path would look like to give them the confidence they needed to proceed,” Mr. Carr said. “By May 31.”

It was April 7. There’d been no prior warning the company was about to set a public, do-or-die deadline.

Yet, there was another reason the timing surprised the feds: Unknown to the public, a team of government officials was already in Kinder Morgan’s data room, and had been poring over the books for more than a week. Ottawa had already started the due diligence for some kind of potential arrangement that could see it put money into Trans Mountain.

Over months, as Ottawa moved closer to buying a pipeline, public statements by both the company and the government stirred heated political reactions – but they were often tactics more than disclosure. Behind the scenes, a different negotiation was playing out.

This wasn’t a typical bureaucrat’s business. Governments don’t buy pipelines every day. This was the world of dealmakers, of investment bankers, corporate lawyers and CEOs.

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Finance Minister Bill Morneau in the Commons.Sean Kilpatrick/The Canadian Press

Finance Minister Bill Morneau, himself a former CEO who built up his firm, Morneau Shepell, with acquisitions, pulled together that kind of team, composed of very atypical civil servants.

One was Ava Yaskiel, global head of corporate and M&A law at international law firm Norton Rose Fulbright, who took a leave in January to take on an unusual two-year stint as associate deputy minister of finance, the No. 2 bureaucrat in the department.

Then there were two wealthy former investment bankers who had become public servants.

The first was Tim Duncanson, a onetime Lazard Freres investment banker who spent the bulk of his career as a managing director at Gerry Schwartz’s Onex Corp., working on deals including Onex’s short-lived purchase of Las Vegas’s Tropicana casino. It was another Onex alumnus, Nigel Wright, a former chief of staff to then-prime minister Stephen Harper, who persuaded Mr. Duncanson to leave corporate finance for public service in 2015, according to a former colleague. The 50-year-old, who still sports the impeccable business attire of an investment banker, has a title as senior adviser to deputy minister Paul Rochon that doesn’t tell his tale: He works outside the hierarchy as designated hitter on key negotiations, such as Ottawa’s 2017 agreement to lend $372.5-million to Bombardier.

As talks became serious, Mr. Morneau also drafted in a long-time friend, Evan Siddall, from his post as president of Canada Mortgage and Housing Corp. The former Goldman Sachs investment banker and chief financial officer at Irving Oil had come into the public service in 2011 as a special adviser to then-Bank of Canada governor Mark Carney, another Goldman Sachs veteran, before taking over CMHC and launching an unprecedented shake-up of the Crown corporation.

The unusual group was led by a minister, Mr. Morneau, who is still more CEO than politician, and, as one government source observed, “in his ecosystem” running a deal. He led a closed-door, high-pressure dance with Kinder Morgan that only occasionally bubbled out into the political drama outside.

Both really started Jan. 30, when B.C. Environment Minister George Heyman announced the province would seek to “regulate” bitumen flowing through the province. That set off a bitter spat with Alberta, and sparked increasingly nervous calls from Kinder Morgan executives to Mr. Carr and the PMO.

Early discussions included a half-day session with the company’s legal advisers in the building that houses the Prime Minister’s Office, where government lawyers insisted B.C. had no jurisdiction to carry out its threats. But Kinder Morgan, it seems, was not convinced the province would be unable to harass the project to death.

Talks also turned quickly to financial risk – and Kinder Morgan’s lead player changed from Mr. Anderson, president of the Canadian subsidiary, to Steven Kean, the Houston-based CEO of Kinder Morgan Inc. Some in Mr. Trudeau’s government suspected that meant the company’s interest might be turning from managing the pipeline project to getting out of it. By late March, federal officials led by Mr. Duncanson started to look at company numbers.

Then, in public, Kinder Morgan’s April 8 ultimatum pushed governments into a new phase of high-pressure, high-speed talks.

In Edmonton, Premier Rachel Notley cancelled her trip to the same New York conference Mr. Carr was attending. And she immediately floated a big back-up plan: Alberta might buy the pipeline.

It clearly intensified the pressure on Mr. Trudeau’s government to deal. Infrastructure Minister Amarjeet Sohi of Alberta, who had been strenuously arguing to cabinet colleagues that he had to see the project built, took his lumps at a pro-pipeline rally at the Alberta legislature on April 13, where he insisted he project would be completed – but was jeered. “I was the lone federal minister from Alberta that went out to talk to the demonstrators, telling them the steps we were taking to get this project built,” Mr. Sohi said in an interview.

By then, it was becoming clear Kinder Morgan saw a financial deal, probably a sale, as the way forward. Alberta had its own team of officials looking through company numbers. Other options, including the suggestion Ottawa might get quick legal certainty through the courts, were being eliminated as far-fetched.

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Prime Minister Justin Trudeau, centre, federal Minister of Finance Bill Morneau, left, B.C. Premier John Horgan and Alberta Premier Rachel Notley met in Trudeau's office on Parliament Hill in April to discuss the deadlock over the Trans Mountain pipeline expansion plan.Justin Tang/The Canadian Press

On April 15, when B.C. Premier John Horgan and Ms. Notley met with Mr. Trudeau in Ottawa, the faint hope that Mr. Horgan would back off was killed. Mr. Horgan, whose minority government depends on Green Party support, left saying he still intended to ask the courts to declare B.C. has some powers to regulate the pipeline.

Mr. Morneau was tasked with striking a deal. Ms. Notley met Mr. Morneau, and the two governments’ teams essentially merged.

Though Alberta was willing to put up money, it was agreed that if it was to be a purchase, Ottawa would be the buyer – to make it a federal Crown project, free from jurisdictional issues, and without the baggage of Alberta owning a pipeline through B.C.

But the company had leverage. Mr. Trudeau had promised a grand energy-and-environment bargain with measures to reduce emissions and an oil pipeline to the ocean. He repeated, almost daily, the pipeline would be built. But Kinder Morgan already had an existing Trans Mountain pipeline, operating since the 1950s. If Kinder Morgan wouldn’t twin it, Ottawa had to buy the pipeline if the expansion was to go ahead.

On May 7, Mr. Morneau flew to Edmonton to meet Ms. Notley, then travelled to Houston the next day, where he and his chief of staff, Ben Chin, joined by Mr. Trudeau’s principal secretary, Gerald Butts, met Mr. Kean in Kinder Morgan’s unassuming office tower.

Over the course of a two-hour meeting, Mr. Kean and his senior vice-president, Dax Sanders, made it clear they felt only Ottawa could complete the pipeline, and, in the view of his listeners, wanted to exact their price for letting the government have it. Mr. Morneau took another tack: He told them Ottawa was willing to indemnify the company against all the political risks posed by B.C.

A week later, with Mr. Duncanson and Mr. Siddall still negotiating, Mr. Morneau sprung his own surprise. He told Mr. Kean he planned to go public the next day with an announcement Ottawa was willing to give Kinder Morgan the insurance against B.C.’s politicking that it had claimed was the problem – and if Kinder Morgan didn’t want that deal, it should shop the pipeline to buyers.

It was a tactic. The company had already shown little interest in an indemnity in private talks. The press conference was a jolt for the talks. It was pressure to get Kinder Morgan to cut to the bottom line on the price of the pipeline.

Talks went quiet over the Victoria Day weekend – as pressing calls from Ms. Notley’s government came in. But on the following Tuesday, May 22, Mr. Kean’s team arrived at Mr. Morneau’s Toronto office. The Finance Minister opened, according to one person present, with a long description of Canada’s political system, and the months of scrutiny the deal would face in the media and in Question Period, underlining he didn’t have leeway to pay a big premium.

The two sides now found that on price, they were in the same ballpark. By the end of the next day, they reached an agreement in principle.

It still meant a scramble to close by the agreed deadline: Monday, May 28, at midnight. Alberta’s negotiating team, led by deputy energy minister Coleen Volk and Ms. Notley’s chief of staff, Nathan Rotman, and including Ms. Notley’s previous chief of staff, Brian Topp, flew to Ottawa.

At the negotiating table, Mr. Duncanson and Mr. Siddall were leading talks, and Mr. Morneau was calling plays on sticking points – suggesting the sides split the risk on some, or telling negotiators to ignore some demands till the last hours, calling Mr. Kean twice to clear obstacles. As the deadline approached, Mr. Morneau went to an infrastructure conference in Toronto – his staff feared cancelling would spread rumour of a pipeline deal – flying back to Ottawa by 10 p.m. to oversee the final hours.

When the cabinet met to approve the deal early the next morning, it was a fait accompli. Ministers had heard Mr. Trudeau repeatedly insist his climate-change plan depended on a pipeline. One source noted ministers had repeatedly talked about tough trade negotiations with the U.S. while being confronted with the fact that the Canadian export Americans valued most, oil, could be shipped only to the United States.

The price of the pipeline was a political football – and will be. Kinder Morgan shareholders didn’t seem to judge it as a major win or loss. Shares of the Houston-based parent company went up modestly after the deal was announced, while shares of its Canadian subsidiary fell by about 3 per cent on the day of the announcement.

And now the government prepares to take ownership of a risky asset that will grow far less risky, and more valuable as it gets through legal challenges, and gets built. Mr. Morneau, and his in-house M&A team, will already know the next deal is trying to sell what he just bought.