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Canada government ready to indemnify Kinder Morgan project, Morneau says

Canada government ready to indemnify Kinder Morgan project, Morneau says”

"But I'm not going to dig in publicly about what tools the federal government is ultimately prepared to use at this point because that is part of the conversations and the negotiations".

If KMI walks away from the project, which British Columbia's provincial government opposes, the indemnification would stay in place in the event that another company takes over, Morneau says. It was a very public sortie, so that the Finance Minister could fire a warning: We're willing to give Kinder Morgan everything they said they needed, and if that's not enough, some other company will take that deal.

"We are willing to indemnify the Trans Mountain expansion against unnecessary delays that are politically motivated", Morneau said. "His stated intentions are to do whatever it takes to stop the project". The company reiterated it needs clarity about the prospects for the pipeline in British Columbia and again stressed the importance of the May 31 deadline.

The project to expand the pipeline is expected to almost triple its capacity to 890,000 barrels per day, raising concerns among opponents of the project of possible oil spills, as well as increased tanker traffic in the narrow waterway.

In a statement, Kinder Morgan Canada chairman and CEO Steve Kean said Morneau's comments were appreciated and he confirmed that talks are continuing. "I'm defending the interests of British Columbia". "Now if they have a plan, they should tell Canadians what it is".

"If the path forward for the pipeline through B.C.is not settled soon, I am ready and prepared to turn off the taps".

Morneau accused the B.C. government of attempting to delay or obstruct the Kinder Morgan project.

Finance Minister Bill Morneau announced earlier Wednesday the government is willing to "provide indemnity" to any investors, be they the project's original architects or otherwise, to ensure the controversial Alberta-B.C. project is built.

Kinder's Canadian unit holds its annual general meeting in Calgary later Wednesday. They had been down 1.5 percent this year, trailing the 3.6 percent gain in the S&P/TSX Energy Index.

Sources have previously said he is examining options such as loan guarantees, a bailout, or taking a stake in the C$7.4 billion project.

The 1,150-kilometre pipeline built in 1953 now carries about 300,000 barrels of oil per day from northern Alberta to the oil terminal in Burnaby, a suburb of Vancouver. "It's a federal jurisdiction and we are in this situation, we're here today, because this is a project that has been provincially and federally approved and we're being thwarted in our efforts to create the kind of jobs and economic advantage we see this project creating for Canadians", he said. Since then, the province has hired a former Supreme Court judge to advise in its legal fight against the project and has also proposed restricting future shipments of oil-sands crude.

But as the attacks get more personal, none of the leaders went quite as far as Alberta opposition leader Jason Kenney who, asked Tuesday about Justin Trudeau's performance on pipelines, referred to the prime minister as "an empty trust-fund millionaire who has the political depth of a finger bowl". To contact the reporters on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net; Natalie Obiko Pearson in Vancouver at npearson7@bloomberg.net. All comments are subject to editorial review.



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