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Alberta Fossil Buys Kinder Morgan Canada, Shows Less Interest in Trans Mountain

The Calgary-based pipeliner that bought Kinder Morgan Canada this week says it isn’t keen to make a bid for the Trans Mountain pipeline expansion, given the “noise” associated with the now taxpayer-owned project.

Pembina Pipeline announced Wednesday that it would buy the assets of Kinder Morgan Canada, along with a portion of a key U.S. pipeline owned by Houston-based Kinder Morgan Inc., for C$4.35 billion, in a move that “increased its bet on the future of Canada’s turbulent oilsands industry,” the Financial Post reports.

The deal brings foreign divestment from Canada’s fossil industry to US$30 billion over the last three years, Bloomberg writes.

Pembina’s big reveal came on the same day that Trans Mountain said it planned to restart construction on its controversial project within 30 days. That company “said it had asked its contractors to begin hiring staff, gathering building materials, and developing detailed construction plans for the project, which the federal government approved for the second time in June,” National Observer states. “The statement also said it expects 4,200 workers to be hired in communities along the project’s route in the coming months,” despite regulatory approvals the pipeline has yet to obtain, continuing fierce public opposition, and multiple pending lawsuits.

“The restart of project construction in Squamish Nation territory is a disregard for nation-to-nation relationships, genuine reconciliation, and respect for Indigenous rights by the Trudeau government,” said spokesperson and counsellor Khelsilem, in an email to Observer. “The Squamish Nation will monitor the restart of construction closely and will be exploring official responses.”

As for Pembina, the Cochin pipeline “runs 2,900 kilometres between Fort Saskatchewan, northeast of Edmonton, and Chicago, and has a design capacity of up to 110,000 barrels per day,” CBC explains. “It imports into Canada a prized light petroleum called condensate which is used to dilute oilsands bitumen to allow it to flow in a pipeline.”

The Kinder Morgan purchase makes the company “a major player in the oil storage business, giving it 10 million barrels of capacity in the crude complex near Edmonton, Alberta, a key hub for oilsands producers,” the Post adds. “With the takeover of Kinder’s Cochin Pipeline system, Pembina also becomes a key provider of the condensate that oilsands companies need to blend with their thick crude to enable it to flow through pipelines.”

But the deal with the Houston-based corporate offspring of the disgraced Enron empire that doesn’t mean Pembina is eager to buy into the deeply troubled pipeline project that Kinder Morgan offloaded to the Trudeau government last year, and that Ottawa is now trying to hand off to Indigenous investors.

“If you think about our 10-year plan and our strategy of getting Western Canada’s hydrocarbons to the highest-price markets on the globe,” Trans Mountain “would clearly fit into that mandate, but we cannot take on the noise with something like that,” CEO Mick Dilger told a conference call.

“Could we successfully own and operate that asset? I can say we’re uniquely qualified to do that. But we’ve got a lot of other things that are going our way, and we don’t want to subject our entire organization and reputation to all the noise that that entails. But strategically, for sure, it’s in scope.”

“Before the deals were announced early Wednesday, there was speculation that Kinder Morgan Canada could be a potential buyer for the Trans Mountain pipeline,” the Post notes. “Multiple Indigenous groups in Canada have expressed interest in buying a stake in the line, and analysts have said the line also might be a good fit for pension funds,” notwithstanding mounting concerns that stranded fossil assets could be a trigger for a future global economic crash.