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Regulatory approvals of Kinder Morgan's $5.6 billion purchase of Terasen Inc. came in rapid fashion with the final green light granted by Investment Canada on Wednesday, only three months after the massive cross-border combination was first announced.
"The endorsement of this transaction by the federal government clearly demonstrates that economic benefits will accrue to Canada from Kinder Morgan's entry into the Canadian energy sector," said Terasen CEO John Reid.
"International investment has helped drive the expansion of the Alberta oil sands, creating additional demand for pipelines to take product to market. Combining Terasen's assets and skills with Kinder Morgan's expertise and resources will allow us to meet that demand, creating jobs and economic opportunities for Canadians in the process."
Kinder Morgan CEO Richard Kinder said the company has agreed to pursue over C$1.4 billion in major infrastructure projects involving the expansion of the Trans Mountain and Corridor pipelines in British Columbia and Alberta, which will add hundreds of new jobs in British Columbia and Alberta.
"Kinder Morgan's investment in Terasen's pipeline operations and greater participation in the expansion of the Alberta oilsands will help meet Western Canadian demand, provide needed infrastructure to support anticipated growth in Canadian oil production, and enable that production to be more competitive in domestic and international markets," Kinder said.
Kinder Morgan will maintain head offices for provincial utility Terasen Gas in Vancouver, for Terasen Pipelines in Calgary and for Terasen Utility Services in British Columbia, with "significant resident Canadian leadership in all of these businesses."
Kinder Morgan also said it will add two Canadian citizens to its board of directors to provide "a Canadian perspective not only for the operation of Terasen's Canadian businesses, but also for all of Kinder Morgan's North American operations."
All necessary regulatory approvals for the transaction have now been obtained and it is expected to close on or before Nov. 30.
Terasen (formerly known as BC Gas) distributes gas to 880,000 customers in British Columbia, has a water utility in the province and provides petroleum transportation services from the Athabasca oil sands in Alberta to markets in Alberta, British Columbia, Washington, the U.S. Rocky Mountain region and the U.S. Midwest.
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