By Paul Vieira
OTTAWA -- Canada said Wednesday the government is prepared to compensate Kinder Morgan Inc. for losses it sustains on its proposed Trans Mountain pipeline expansion fueled by "politically-motivated" delays.
Canadian Finance Minister Bill Morneau told reporters the government also stands ready to compensate other investors who step in to takeover the pipeline should Kinder Morgan make good on its threat to walk away from the project on May 31. The Houston-based company said it would scrap plans to nearly triple the capacity on its existing pipeline, connecting the Alberta oil sands with the British Columbia coast, in the event political uncertainty hovering over the project wasn't removed.
The left-leaning British Columbia government has threatened to use every legal and policy measure it has available to thwart the pipeline unless steps are taken to satisfy its concerns about environmental risk. Canadian Prime Minister Justin Trudeau approved the project in late 2016, as did the previous right-leaning administration in British Columbia.
Mr. Morneau said British Columbia's attempts to block the project are "unconstitutional," as the federal government has authority over interprovincial pipelines. He said the government is resolved to get the pipeline built, whether it is managed by Kinder Morgan or another investor or group of investors.
"There is an economic case for the project, and it's not reasonable for a private-sector" company to resolve differences between governments, Mr. Morneau said at a press conference in Ottawa.
"We are willing to indemnify the Trans Mountain expansion against unnecessary delays that are politically motivated," Mr. Morneau said.
The pipeline expansion would nearly triple the amount of crude oil, to 890,000 barrels a day, that Trans Mountain can carry. The project involves twinning, or laying another pipe, alongside a 710-mile pipe stretching from northern Alberta and across the 4,000-foot elevations of the Continental Divide in the Canadian Rockies to the coast of British Columbia.
Kinder Morgan's Canadian unit has an annual general meeting later Wednesday in Calgary.
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