June 26, 2018 Read More →

Trans Mountain Pipeline sale to feds netted Kinder Morgan a 637% return: Report

Huffington Post/Yahoo News:

Texas-based Kinder Morgan made a seven-fold return on the sale of its Trans Mountain pipeline system to Canada’s federal government, according to a new report that also warns the federal budget deficit could jump by 36 per cent because of the purchase.

The report comes from the Institute for Energy Economics and Financial Analysis (IEEFA), which is funded by a variety of philanthropic groups dedicated to climate and energy issues, including the Rockefeller Family Fund.

The federal Liberals announced in late May they will buy Kinder Morgan’s Trans Mountain pipeline system for $4.5 billion, after the Texas-based pipeline builder warned it could cancel the project due to “continued actions in opposition to the project,” specifically the B.C. government’s efforts to block the pipeline’s expansion.

The project has an estimated $7.4 billion price tag, of which Kinder Morgan says it has already spent about $1 billion. But the IEEFA report estimates that the company has only put about $600 million into the project so far. It estimates the company will make a 637-per-cent gain on the $4.5-billion sale.

It predicts the government will sell the pipeline at a loss “under distressed conditions.”

The federal government is on the hook for about $11.5 billion in costs, including both the purchase and the remaining cost of construction, the report estimates.

“This transaction and the cost of further planning and construction could add a $6.5 billion unplanned expenditure to Canada’s budget during (fiscal year) 2019,” the report stated. “This would increase Canada’s projected deficit of $18.1 billion by 36 per cent. to $24.6 billion.”

Trans Mountain Pipeline Sale To Feds Netted Kinder Morgan A 637% Return: Report

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