Trans Mountain Corp. will be the official name of the government of Canada-owned oil pipeline network that has been mired in a stalled C$7.4 billion expansion project.
Trans Mountain will be headed by CEO Ian Anderson, who had been president of Kinder Morgan Inc.'s Canadian unit, the company said in an e-mailed statement. The Calgary, Alberta-headquartered company is "accountable to the Parliament of Canada through the Canada Development Investment Corporation [CDEV]," the Sept. 5 statement said. "As a wholly owned subsidiary of CDEV, we will be governed by an independent board of directors."
The government closed its C$4.5 billion acquisition of Trans Mountain from Kinder Morgan Canada Ltd Aug 31. The closing of the purchase came a day after Canada's Federal Court of Appeals effectively quashed building permits for a project that would see the capacity of the 1950s-vintage line almost tripled to 890,000 barrels per day from the existing 300,000 bbl/d.
Anderson announced shortly after the court ruling that Trans Mountain was shutting down all construction activity. The ruling came after the federal government bought the line to preserve the project, which Prime Minister Justin Trudeau described as vital to Canada's economic interest. Trans Mountain, which links the oil sands region in Alberta with a marine terminal in British Columbia, is Canada's only oil export point with access to markets other than the U.S., which is glutted with crude from shale deposits. The court ruling said the government did not adequately consult First Nations groups on Canada's west coast about the effects increased tanker traffic in the Vancouver, British Columbia area and other issues.
Trudeau was in Alberta Sept. 5 to meet with Premier Rachel Notley, who is urging the federal government to use its legislative power to sidestep the ruling or appeal it to the Supreme Court of Canada. So far Trudeau's government has not indicated a course of action, saying it is still reviewing the decision. If it decides to try to meet the criteria of the court ruling, the regulatory process could take more than a year and then face further challenges. Both politicians are likely to face elections in 2019.
Separately on Sept. 5, the CEO of the nation's largest oil company by revenue said it would curtail oil sands expansion until Canada's pipeline bottlenecks are addressed. There is "clearly a question of confidence in Canada," Suncor Energy Inc. CEO Steve Williams told an investor conference in New York.
Suncor will consider expansions "but you will not see us approve those projects until we have more clarity on pipelines," he said. "We wait to see what progress is made on these pipelines. But I would want to see actual physical progress on the ground before I commit to them."