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Kinder Morgan Canada completes $1.75B IPO to help fund Trans Mountain project

Kinder Morgan Inc.'s Canadian unit completed its C$1.75 billion initial public offering May 30 at C$17 per share and will trade on the Toronto Stock Exchange under the symbol KML.

The shares in the Kinder Morgan Canada Ltd. offering were previously expected to be priced between C$19 and C$22 per share. But along with the lower price per share, Kinder Morgan increased the number of shares to be sold, up to about 102.9 million from the previous 92.1 million shares. Kinder Morgan now retains 70% of Kinder Morgan Canada Ltd., down from the previously planned 75%.

The offering includes the sale of a portion of Kinder Morgan's Canadian business, which is composed of the Trans Mountain pipeline system, the Puget Sound pipeline, the Jet Fuel pipeline system, the Canadian portion of the Cochin pipeline system, the Vancouver Wharves terminal and the North 40 Terminal. The business also includes jointly controlled investments in the Edmonton Rail Terminal, the Alberta Crude Terminal and the Base Line Terminal.

The IPO has some opposition. Greenpeace Canada had asked the Alberta Securities Commission, the leading reviewer of the IPO, to halt the offering, citing what it determined to be inadequately disclosed financial risk from emissions and overstated demand for oil sands crude.

Following reports about the expected IPO, Kinder Morgan announced May 25 that, conditioned on the success of the IPO, it will move forward with the Trans Mountain Expansion project to nearly triple its crude oil transport capacity from Alberta's oil sands region to the British Columbia coast, to about 890,000 barrels per day.