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Expects to Sell

Canada first offered earlier this month to indemnify the expansion project but is now likely to buy it, along with the existing pipeline that’s been in operation since 1953. The Canadian government plans to sell the project — the existing line and its expansion — as soon as is reasonable once it’s guaranteed that it will be built, the person said. It’s unclear if other Kinder Morgan assets will be included in any sale.

A spokesman for Canadian Finance Minister Bill Morneau said he wouldn’t comment on “speculation.”

In an emailed statement late Monday, the Calgary-based company said it didn’t intend to issue updates “unless and until these discussions have concluded or we’ve reached an agreement that satisfies our two objectives: clarity on the path forward, particularly with respect to the ability to construct through British Columbia, and ensuring adequate protection of our KML shareholders.”

Kinder Morgan Canada, a unit of the Houston-based parent, was little changed at $16.59 in Toronto trading Monday, for a market value of $5.76 billion.

The two sides had been in talks since the company set a May 31 deadline for the government to give certainty in the face of opposition from British Columbia, which is concerned about increased tanker traffic and possible oil spills along the Pacific coast. Trudeau pledges regularly, including on Monday, that the pipeline will be built.

The Trans Mountain expansion would almost triple capacity to 890,000 barrels of oil on a line running from Alberta to a terminal near Vancouver. The 980-kilometre (600-mile) expansion is seen by the oil industry as a crucial link to Asian markets, allowing producers to diversify away from the U.S., which takes the vast majority of Canadian oil exports.

Bloomberg.com