A report: The National Energy Board Guaranteed Kinder Morgan a Fund to Push Pipeline Expansion Through Regulatory Review
Kinder Morgan Energy Partners Limited Partnership—a Texas based Master Limited Partnership—wants to build a twin pipeline from Edmonton, Alberta to its Westridge Dock in Burnaby, BC. The pipeline is designed to carry 840,000 barrels a day of Alberta diluted bitumen. Eventually this means more than 1.1 million barrels a day of crude oil and petroleum products flowing across BC’s fresh waterways with much of it destined for export by oil tanker through Burrard Inlet and the Salish Sea.
Kinder Morgan has been pursuing its expansion in stages since it bought the Trans Mountain system from Terasen in 2005. This piecemeal approach allows the company to avoid full environmental assessment and public interest scrutiny for much of its expansion.
In a precedent setting NEB decision in 2011 the Board granted Kinder Morgan the right to pre-fund future expansion applications from five firm shipping customer contracts to its Westridge terminal.
Two of the five companies funding Kinder Morgan’s pre-development costs are Chinese National Oil Companies PetroChina and Nexen, while the remaining three are US Oil, Astra and Cenovus. These companies pay an average premium of $1.45 per barrel to guaranteed $28.6 million per year is allocated to the special account.
Over a ten year period, Kinder Morgan will amass $286 million to push its expansion plans through regulatory review. Pre-funding through shipper charges means that the Canadian public and the Canadian economy bear the risk and the cost of Kinder Morgan’s pre-development process, rather than the risk and cost being borne by Kinder Morgan’s US based shareholders.
Read More: http://www.robynallan.com/2014/06/30/neb-guaranteed-kinder-morgan-a-fund-to-push-through-regulatory-review/?utm_content=buffercfc6c&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
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