A July 22 deadline came and went Sunday, with no third-party buyer found for the $4.5 billion Trans Mountain pipeline and $7.4 billion Trans Mountain Expansion Project (TMEP).
“I can confirm that a third party buyer has not yet been found,” said federal Ministry of Finance spokesperson Jack Aubry. “The government has received interest from potential owners, including Indigenous groups and institutional investors.”
The July 22 deadline was the one given for Kinder Morgan to help Ottawa find a third party buyer, after the Trudeau government announced plans to buy the existing Trans Mountain pipeline for $4.5 billion and assume the completion of a $7.4 billion twinning, about $1 billion of which has already been spent.
Ottawa will continue to try to find a third-party buyer or partners. In recent weeks, First Nations, including the Whisper Pines First Nation (Clinton Indian Band) and the Cheam First Nation, have expressed interest in taking a stake in the expansion project. So has the Government of Alberta.
A number of analysts expect that Canada will need to complete the project – or at least bring it to substantial completion – before any third party buyer would take the risk of buying the project.
But once complete, they say Canada should have no problem finding a buyer or partners.
"I was, and continue to be, skeptical that any private company will wish to purchase the pipeline until more substantive progress is made and the certainty of completion is there," said Trevor Tombe, associate professor of economics at the University of Calgary. "Once built, Ottawa will have no trouble finding a buyer -- no trouble at all. The only relevant question then is: at what price can it be sold and how much did it cost to build.?"
The next major deadline for the sale of Trans Mountain to Ottawa is in August, when Kinder Morgan shareholders will vote on the proposed sale.
If shareholders approve the sale, Canada will acquire the existing Trans Mountain pipeline and associated assets for $4.5 billion, and assume financial responsibility for completing the $7.4 billion expansion.
