Kinder Morgan Secures Financing for Trans Mountain Expansion Project

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Kinder Morgan has secured satisfactory financing for the Trans Mountain Expansion Project, and the finalization of an initial public offering (IPO) is expected no later than May 31. Construction on the project is expected to start in September and be completed in December 2019.

The Trans Mountain Expansion Project is a $5.5 billion project that will provide western Canadian oil producers with an additional 590,000 bpd, resulting in total pipeline capacity of 890,000 bpd, of shipping capacity and tidewater access to the western United States and global markets. The project is underpinned by 15- and 20-year shipper commitments of 707,500 bpd, or roughly 80% of the capacity on the expanded pipeline. The other 20% is reserved for spot volumes as required by the National Energy Board.

“Our execution planning is complete, our approvals are in hand, and we are now ready to commence construction activities this fall generating thousands of direct jobs for Canadians, including significant benefits to Indigenous communities in Alberta and British Columbia,” said Ian Anderson, president of Kinder Morgan Canada Limited.

The final investment decision was contingent on securing financing, the company said, adding, “While the political climate was not ideal, the process proceeded at this time because the Trans Mountain Expansion Project financing contingency period, as specified in shipper agreements, concludes at the end of May.”

The offering constitutes a sale of a portion of KMI’s interest in the Canadian business of KMI. The business is composed of: the Trans Mountain pipeline, 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. It also includes three jointly controlled investments: the Edmonton Rail Terminal, the Alberta Crude Terminal and the Base Line Terminal.

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