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A ship receives its load of oil from the Kinder Morgan Trans Mountain Expansion Project's Westeridge loading dock in Burnaby, B.C.JONATHAN HAYWARD/The Canadian Press

Kinder Morgan Inc. is facing new challenges to its proposed Trans Mountain pipeline expansion as New Democratic Party and Green Party leaders say they have a deal to form government in British Columbia and will oppose the project.

The Liberals – who gained 43 seats in the recent election – gave their blessing to the $7.4-billion expansion project, but the NDP and the Green Party – which together have 44 seats – both opposed it, though it is not clear what levers they can pull to fulfill their pledge to block it.

At a news conference, NDP Leader John Horgan and Green Party's Andrew Weaver said they had a pact to defeat the Liberals in a confidence vote in the legislature and will then seek to form government without triggering an election. While the leaders offered no details until the deal is put to the NDP caucus for approval on Tuesday, Mr. Weaver suggested the two sides have agreed to a common approach on the Trans Mountain project.

Read more: What Kinder Morgan's Trans Mountain pipeline will mean for B.C.'s coast

"This issue of Kinder Morgan is one that was critical to us and I think you'll see that reflected in tomorrow's announcement, assuming that the B.C. NDP caucus ratify it," Mr. Weaver told reporters. His own three-person caucus has already approved.

The political threat to the Trans Mountain expansion comes as First Nations in British Columbia ramped up their attack on the Kinder Morgan project by issuing a warning to investors that the company's Canadian shareholders face major risks as a result of Indigenous legal challenges to the pipeline project, which would nearly triple the existing line's capacity to 890,000 barrels a day.

A legal brief prepared by the coastal Tsleil-Waututh and the West Coast Environmental Law association argues the court challenges create "significant uncertainty" around the pipeline, which is a major asset for Kinder Morgan's Canadian subsidiary.

"In our opinion, the leading jurisprudence suggests that the [expansion] project will not get built, and certainly [not] on the schedule that Kinder Morgan is suggesting," said the brief, which is being sent to major banks, brokerage houses and institutional investors in the United States.

"Likely outcomes include a permanent rejection if aboriginal title is recognized, or an interim injunction while a title case is being heard," it added. "Combined with significant political and reputational risk, it is our opinion that the project faces material risk."

The federal Liberal government approved the expansion last November subject to Kinder Morgan satisfying mostly technical conditions imposed by the National Energy Board.

However, the recent election in British Columbia has raised the stakes as the Green Party and NDP vow to block it, while Alberta Premier Rachel Notley argues the province has no right to do so.

Last week, Houston-based Kinder Morgan said it would move forward with the pipeline expansion, pending the successful completion of an initial public offering.

Shares in the company's Canadian unit are expected to start trading as early as Tuesday on the Toronto Stock Exchange. However, the company and its bankers were forced to temper expectations, pricing the shares on offer at $17 apiece, down from a previous range of $19 to $22. Proceeds are still expected to be $1.75-billion, with the company offering more shares to make up for the lower price. But the stock could come under pressure as it begins trading.

Indeed, the lower issue price reflects uncertainty that Trans Mountain will actually be built on time and on budget, said Laura Lau, a senior portfolio manager at Brompton Funds in Toronto.

Investors are buying exposure to Kinder Morgan's existing Canadian assets as well as a targeted annual dividend of 65 cents per restricted voting share. The pipeline expansion is effectively "gravy," she said. "I think that's how they tried to sell it."

The company said it expects to start construction in September.

"It's nearly June," Ms. Lau said. "So we'll see. Even if you start it in September, building through the mountains is not easy, and if you're delayed a season, then it's another year."

The offering concluded as the company faces a flood of new complaints over the detailed pipeline route to the coast. More than 400 statements of opposition have been filed with the National Energy Board, raising the prospect of further delays should the company fail to reach an agreement with affected landowners.

As well, there are 19 separate lawsuits, including 12 from First Nations communities, challenging NEB's review process, the federal government's consultations and the extent of provincial reviews. Some First Nations communities have court-recognized fishing rights in the coastal waters, while others are asserting title to land through which the pipeline crosses.

Kinder Morgan acknowledged in its prospectus that the claims, if successful, "could result in the total stoppage of the Trans Mountain expansion project, which stoppage would have a material adverse effect on the business."

"I want to put a face and a name to the legal risk," Tsleil-Waututh councillor Charlene Aleck said in a telephone interview Monday. "Through our aboriginal law, we've upheld and maintained the stewardship of our land and that's got to be respected. And if we can't do that through letting them know we're opposed, we'll use all legal means."

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