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Kinder Morgan files for IPO to finance Trans Mountain expansion project

EBR Staff Writer Published 25 April 2017

Kinder Morgan’s Canadian subsidiary has filed for an initial public offering (IPO) to raise funds for its $6.8bn Trans Mountain expansion project.

For the public issue, the company has filed a preliminary prospectus with the US Securities and Exchange Commission (SEC). 

The IPO will constitute a sale of a part of Kinder Morgan’s stake in its Canadian business.

In the IPO filing, Kinder Morgan said: “This action is consistent with guidance KMI has provided, most recently in its April 19, 2017 first quarter earnings release and during the related earnings call, that KMI continues to develop financing alternatives for the Trans Mountain Expansion Project, either by bringing in a joint venture partner into Trans Mountain or conducting an initial public offering of a portfolio that would include Trans Mountain and other Kinder Morgan Canadian assets.”

The American pipeline company said that the preliminary filing is a major step in finding the best opportunity for securing acceptable financing terms for the Trans Mountain Expansion Project.

In November 2016, Kinder Morgan was given the nod by the Canadian government to go ahead with the project, which would be an expansion of the existing 1953-built Trans Mountain Pipeline system laid between Edmonton in Alberta and Burnaby in British Columbia.

The construction of the pipeline expansion project has been slated to begin from September, with its commissioning likely to be completed two years later.

Expansion of the Trans Mountain Pipeline system is intended to increase the pipeline capacity almost three times from the existing capacity of 300,000 barrels of oil daily.

Kinder Morgan Canada’s business comprises the Trans Mountain pipeline system, the Jet Fuel pipeline system, the Puget Sound pipeline, the Vancouver Wharves Terminal, the Canadian portion of the Cochin pipeline system, and the North 40 Terminal. Also included in the business are three jointly-controlled investments in the Alberta Crude Terminal, the Base Line Terminal, and the Edmonton Rail Terminal.


Image: Kinder Morgan plans to raise funds for the Trans Mountain expansion project through IPO filing. Photo: courtesy of supakitmod/ FreeDigitalPhotos.net.