Kinder Morgan Canada Shares Drop 3% After More Potential Pipe Delay


CALGARY, Alberta, Dec 5 (Reuters) - Kinder Morgan Canada Ltd shares fell as much as 3 percent on Tuesday, the day after the company said its C$7.4 billion ($5.8 billion) Trans Mountain pipeline expansion could miss the revised timetable of a September 2020 start.

Kinder Morgan's Trans Mountain expansion to Canada's west coast has already been delayed by nine months. The company said late on Monday that the lack of clarity around municipal permitting and the related judicial process could push it back further.

The project, an expansion of the pipeline from Alberta's energy heartland to a port near Vancouver, would nearly triple capacity to 890,000 barrels per day and significantly increase crude tanker traffic.

The company, a unit of Houston-based Kinder Morgan Inc, did not immediately respond to a request for comment.

Kinder Morgan has not updated its cost estimate for the project since March, and analysts expect the delay to add to the overall budget.

"I find it a very odd and sad situation that we have this sort of conflict going on once you've got federal approval and previous provincial approval," Chris King, vice president and portfolio manager at Morgan Meighen & Associates, said.

He said he expects the company to provide an update in a week or two and give a more detailed timeline for the project next year.

On Monday, Kinder Morgan separately argued before Canada's energy regulator that the project had been delayed due to what it said was the western city of Burnaby's vagueness in providing timelines.

The city, through which the project passes, had disputed that view, saying officials treated Kinder Morgan impartially, and that any delay was caused by what it characterized as the company's poorly prepared applications.

Canadian oil producers, whose landlocked product trades at a discount to the West Texas Intermediate benchmark, say they need more pipeline capacity to fetch better prices.

By 11:46 ET (1646 GMT), Kinder Morgan Canada shares were down 2.8 percent at C$16.57 on the Toronto Stock Exchange, while the benchmark energy index was up 0.5 percent.

(Reporting by Ethan Lou and Alastair Sharp; Editing by David Gregorio and Jonathan Oatis)


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