CALGARY — The Canadian federal government will likely have a difficult time selling the Trans Mountain pipeline system it purchased for $4.5-billion on Tuesday until it can show the risks to the project have been reduced.
The federal government announced a deal with Houston-based Kinder Morgan Inc. to purchase the existing Trans Mountain pipeline between Alberta and British Columbia, as well as the expansion project to twin the pipeline, before markets opened Tuesday and Finance Minister Bill Morneau said Ottawa did not intend to be a long-term owner.
But analysts believe Ottawa will need to provide the same financial indemnity it offered to Kinder Morgan to any potential buyer for the pipeline before it can sell it.
“Those guarantees are still going to be required in my opinion,” said Canaccord Genuity analyst David Galison, who added that British Columbia’s opposition to the project would continue to pose a threat to its construction.
In a research note, he said that Calgary-based pipeline giants Enbridge Inc. and TransCanada Corp. would be likely buyers if they “were able to secure sufficient security from the government.”
Until that time, and until the court challenges to the project are resolved, Galison said, “I don’t believe it does increase certainty.”
How the Trans Mountain Pipeline saga unfolded: Key dates from 1953 to now
>How the Trans Mountain Pipeline saga unfolded: Key dates from 1953 to now
Source : http://calgaryherald.com/commodities/energy/ottawa-buys-trans-mountain-pipeline-for-4-5-billion-but-can-it-sell-it/wcm/2548266d-9d77-4e67-aba5-21ddaa1eff7fThanks you for read my article Ottawa Will ‘provide Indemnity’ To Investors Against Pipeline Delays, Finance Minister Bill Morneau Says