A sign warning of an underground petroleum pipeline is seen on a fence at Kinder Morgan’s facility where work is being conducted in preparation for the expansion of the Trans Mountain Pipeline, in Burnaby, B.C., on Monday April 9, 2018. THE CANADIAN PRESS/Darryl Dyck
Kinder Morgan Canada Ltd.'s shares traded higher after the federal government announced it would buy its controversial Trans Mountain pipeline for $4.5 billion.
The shares were up 47 cents or about three per cent at $17.06 in early trading on the Toronto Stock Exchange after going as high as $18. The company's stock had been halted prior to the announcement.
Ottawa is acquiring the existing Trans Mountain pipeline and the expansion project.
The company estimated the deal is worth about $12 per restricted voting share, after capital gains tax. It expects its approximately 30 per cent share of after-tax proceeds to be approximately $1.25 billion.
Kinder Morgan Canada will continue to hold an integrated network of crude tank storage and rail terminals in Alberta. It will also own a terminal in Vancouver and the Cochin Pipeline system which transports light condensate from the United States to Fort Saskatchewan, Alta.
The company had ceased all non-essential spending on the project until it receives assurances it can proceed without delays, setting a May 31 deadline on getting those guarantees.
Companies in this story: (TSX:KML)
