Canada's Govt May Need to Pay More to Expand Trans Mountain
(Bloomberg) -- Kinder Morgan Canada Ltd. said the Trans Mountain oil pipeline expansion will cost 26 percent more than estimated and take a year longer to complete.
The project is now expected to cost C$9.3 billion ($7.1 billion), Kinder said in a filing on Tuesday. The company had hinted that a revision was coming late last month, based on the uncertainty the investment had encountered.
The revised cost estimate may mean the Canadian government will have to shell out more money to get the controversial expansion finished after it moved to buy the pipeline for C$4.5 billion in May.
When that deal was announced, Finance Minister Bill Morneau said there'd be no fiscal impact of the plan -- suggesting he didn't expect to make or lose money on the deal. At the time, he declined to say what construction costs would be for the expansion and downplayed concerns about finding a new buyer.
The Trans Mountain development has been beset by legal woes, environmental protests and provincial opposition. As of April 9, Kinder had invested C$1.1 billion, including funds spent upgrading the Westridge Marine Terminal in Burnaby, British Columbia.
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