(Reuters) - Kinder Morgan Inc has made a final investment decision on its Trans Mountain pipeline expansion, contingent on the successful public offering of its Canadian division, the company said on Thursday as it acknowledges the political uncertainty weighing on the project.
An election this month in the Canadian province of British Columbia, through which Trans Mountain passes, has resulted in the environmentalist Green Party holding the balance of power, threatening the expansion even though it has federal approval.
That has complicated the initial public offering (IPO) for Kinder Morgan Canada Ltd, whose purpose was to fund the expansion. Kinder Morgan has priced its Canadian IPO at C$17 per share, below its initially projected range of C$19 to C$22.
“The final investment decision was contingent on securing financing,” the company said in a statement.
“While the political climate was not ideal, the process proceeded at this time because the Trans Mountain Expansion Project financing contingency period, as specified in shipper agreements, concludes at the end of May.”
The Trans Mountain expansion nearly triples the capacity of the crude pipeline from the oil-producing Alberta province to the British Columbia coast.
Official recount results on Wednesday from the closely contested May 9 election confirmed that the pro-Trans Mountain ruling British Columbia Liberal Party lost its legislative majority. That forces it to woo the Greens to govern, potentially making concessions.
In the worst scenario for the Liberals, the Greens could form their own majority government with the second-place New Democrats, who also oppose Trans Mountain.
Kinder Morgan has priced its initial public offering of 102.9 million shares of common stock for total gross proceeds of C$1.75 billion.
Reporting by Diptendu Lahiri in Bengaluru and Ethan Lou in Calgary, Alberta; Editing by Lisa Shumaker