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Kinder Morgan Inc.’s (NYSE: KMI) stock price struggled on May 30 as a new political alliance in British Columbia announced its determination to kill the company’s Trans Mountain Expansion project.
However, Canadian Prime Minister Justin Trudeau insisted to reporters during a trip to Italy that the 715-mile pipeline project would go forward.
“Regardless of a change in government in British Columbia or anywhere, the facts and evidence do not change,” he said. “The decision we took on the Trans Mountain Pipeline was based on facts and evidence on what is in the best interests of Canadians and indeed, all of Canada. That is what drives us in the choices we make. We stand by those choices.”
The Green Party promised to kill the Trans Mountain project and Petronas’ $20 billion LNG export facility on Lelu Island near Prince Rupert.
The Globe And Mail newspaper reported on May 30 that the Green Party and its new ally, the New Democratic Party (NDP) would “immediately employ every tool available” to stop Kinder Morgan’s project from going forward. The newspaper was quoting the text of an announcement released prior to a news conference.
Also on May 30, the neighboring province of Alberta warned British Columbia not to interfere with the Trans Mountain project.
“Mark my words, that pipeline will be built,” Alberta Premier Rachel Notley told reporters in a story reported by Reuters. “The decision has been made.”
British Columbia’s Green Party, which won three seats in the province’s legislature in the May 9 election, joined with the center-left NDP on May 29. No party won a majority of the seats in the legislature, but the alliance would have 44 seats to the ruling center-right British Columbia Liberal Party’s 43. Unless Premier Christy Clark is able to convince other legislators to support her and form a majority, she would be forced to step down.
Clark said she would not resign and would call for a confidence vote, though she admitted that she would likely face defeat.
Andrew Weaver, leader of the Green Party, said during a news conference on May 29 that the Greens and NDP had agreed on what to do about Trans Mountain, but did not elaborate. He said the agreement was “critical” to his decision to join with NDP.
Kinder Morgan’s stock fell 83 cents per share, or 4.31%, on May 30.
Elizabeth May, leader of the Federal Green Party, said she believes the Trans Mountain project is dead, although a legal battle could ensue. The project has been delayed because of opposition from environmental activists.
Kinder Morgan made a final investment decision on the Trans Mountain project on May 25 and launched an IPO on May 30, hoping to generate CA$1.75 billion (US$1.31 billion).
Joseph Markman can be reached at jmarkman@hartenergy.com and @JHMarkman.
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