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Kinder Morgan sells space & looks for investors for its $7.4 billion Trans Mountain pipeline

Vancouver-based Council of Canadians organizer AJ Klein at the mobilization against the Trans Mountain pipeline on Burnaby Mountain, November 2014.

Texas-based Kinder Morgan Inc. is booking space on its 890,000 barrel per day Trans Mountain tar sands pipeline and has filed a prospectus for an initial public offering (IPO) to sell shares in the pipeline to institutional investors, which could include the Canada Pension Plan Investment Board (CPPIB).

The Globe and Mail reports, “Kinder Morgan Inc. has revealed a wider group of oil-company shippers on its contentious Trans Mountain pipeline… Companies that have booked capacity … now include Athabasca Oil Corp., MEG Energy Corp., Teck Resources Ltd. and Brion Energy Corp., a unit of state-run China National Petroleum Corp.”

One of those shippers – Vancouver-based Teck Resources Ltd. – is behind the proposed Frontier open-pit mine. The mine would be located about 40 kilometres from the Fort McKay First Nation reserve and about 110 kilometres north of Fort McMurray. Construction on the mine could begin as soon as 2019. The mine could produce 74,000 barrels per day by 2026 and then 277,000 barrels per day by 2035.

Today’s news article adds, “The updated roster [of shippers on the Trans Mountain pipeline] is detailed in a prospectus for an initial public offering of restricted voting shares contemplated by the Houston-based company to help fund the $7.4-billion expansion…”

The Trudeau government approved the pipeline in November 2016, but as the newspaper has previously reported, “The project still needs ‘acceptable financing’ and a final investment decision.”

On April 24, the company announced filed a prospectus for an IPO of restricted voting shares to finance the pipeline, though it did not disclose the IPO size or a timeline. An IPO is when shares in a company are sold to institutional investors that in turn sell those shares to the general public on a securities exchange. Kinder Morgan has reportedly hired Toronto-Dominion Bank as an adviser on this.

On February 17, Reuters reported, “Kinder Morgan Inc. has begun talks with institutional investors including major Canadian pension funds and private equity firms to raise capital for its Trans Mountain pipeline project, according to people familiar with the process. Kinder Morgan has held discussions with Canada Pension Plan Investment Board, the Caisse de dépôt et placement du Québec and Ontario Teachers’ Pension Plan Board, three of the biggest Canadian pension funds, the people added. It was unclear whether talks with the three pension funds were still ongoing.”

But by February 27, the Ontario Teachers’ Pension Plan had tweeted, “Ontario Teachers’ is not in talks to finance Kinder Morgan pipeline expansion.”

Help us get the Canada Pension Plan Investment Board to make a similar declaration. Please go to this action alert Stop your pension from building pipelines! that says to CPPIB president Mark Machin, “As a CPP contributor, I urge the CPPIB to take a principled stance and publicly refuse to invest any money in Kinder Morgan’s Trans Mountain pipeline.”

Kinder Morgan says it will begin clearing brush along the pipeline route this September, start construction on the pipeline in January 2018, and has set in-service date of late 2019. Court challenges have been launched to stop this, and there will likely be on-the-ground resistance, but stopping investment in the pipeline is also a key strategy.

The Council of Canadians has been opposing the Kinder Morgan Trans Mountain tar sands pipeline since August 2011.