Long Term Trend: Kinder Morgan, Inc. (KMI)

Howard TerryApr 11, 2018

Alberta Premier Rachel Notley says the province will buy the Trans Mountain pipeline project outright if that's what it takes to get it built.

Risky as one never knows what the courts will do with a dispute as political as this.

The B.C. NDP government, for its part, will now have to stand up to what may be serious economic attacks from both Ottawa and Alberta.

Notley said Monday she had told Horgan that Alberta will be moving forward aggressively against B.C. including through legislation this week to give the premier power to reduce oil flows to B.C.

A man holds a sign while listening as other protesters opposed to the Kinder Morgan Trans Mountain pipeline extension defy a court order and block an entrance to the company's property, in Burnaby, B.C., on Saturday April 7, 2018.

Kinder Morgan, Inc (KMI) is an energy infrastructure company in North America.

As I have pointed out in this space before, B.C. needs literally billions of dollars from Ottawa to meet all kinds of commitments, including building transit lines and housing and funding health care.

If anything, the developments in the last two days prove that not one of the major governments involved in the pipeline debate has any clue how jobs are created. Asked about the possibility of the federal government penalizing B.C.by withholding transfer payments, she said, "I am confident that standing up for British Columbians' rights is our right as a province and Ottawa will see that".

Company founder and executive chair Richard Kinder himself led off a conference call with financial outlets Monday morning, declaring that the decision to suspend most work on the project was "the correct and appropriate economic decision from the standpoint of the shareholders". "This is what we'll be devoting some attention to in the coming weeks", Kean said. (NYSE:KMI), we can see that the average consensus target price based on contributing analysts is now $21.62. And various court proceedings have come and gone, with some still remaining.

Kean said his company is considering investments in other pipelines elsewhere, just not in Canada. These situations can be discovered by chart analysis and technical indicators, which we can use for our advantage - and that is precisely what technical analysis is trying to do. That capital spending is expected to boost Kinder Morgan's all-important earnings before interest, taxes, depreciation and amortization or EBITDA by US$1.6-billion annually, and inject a little pop into a stock price that lost its fizz, sliding from US$40 to US$15 over the past three years. Institutional investors and hedge funds own 53.91% of the company's stock. "A company can not resolve differences between governments", he said. "So this is a very viable and strong entity on its own without the project".

The Trans Mountain expansion would complement the capacity of TransCanada's Keystone XL pipeline, a competing transport route that is also meant to carry Alberta's oil to overseas markets. (TSX:SU) Fort Hills oil sands project.

But they are now under pressure to put their words into action.

Notley has said the pipeline is critical to helping Canada's economy. Such an arrangement might see the government providing loan guarantees or actual equity stakes in the pipeline.

So now, while it should be defending its own constitutional power over a national project, Ottawa is anxious that pushing through Trans Mountain will not only cost the Liberals votes in B.C., it might also resurrect Energy East in Quebec.

"It's been done before", said Trevor Tombe, associate professor at the University of Calgary's economics department. So he has calculated he can wait Kinder Morgan out until it abandons Trans Mountain - and no one will do much to him or his government.

Such a step would increase the pain on the government next door - and its consumers - although that might simply undercut the majority support Trans Mountain enjoys across B.C. He's disappointed with how the provincial NDP leadership has confronted the issue of the pipeline saying it has badly shaken investor confidence.

Several oil companies have voiced concern that investors may start to take their money elsewhere if even federally approved projects can't get built in Canada. What is standing in the way of all of them are "progressive" politicians.

Jonathan Wilkinson says the way Premier Horgan is confronting the issue of the Trans Mountain pipeline is irresponsible and is eroding investor confidence.

This could well be the defining moment for the Trudeau government.

"The implications here are seismic", said BC Chamber of Commerce president Val Litwin.

"We used to wear this as a badge of honor - that we were not like the tin-pot regimes around the world where they carry kalashnikov (rifles)", he said.

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