Shares in the Canadian unit of Kinder Morgan Inc. are set to start trading Tuesday after an initial public offering that raised C$1.75 billion ($1.3 billion) in one of the largest IPOs in Canada. The shares were sold at C$17 each.
The funds will be used to help pay for the controversial C$7.4 billion project to nearly triple the capacity of Trans Mountain pipeline, which will allow Canada to increase oil exports to Asia. The expansion may face renewed opposition after the New Democratic Party and the Green Party agreed Monday to form an alliance that would give them enough support to oust the ruling Liberal Party led by Premier Christy Clark.
Both the NDP and the Green Party oppose the pipeline plan, and said the expansion project played a ‘critical role’ in the negotiations and will be reflected in their four-year pact. Clark, who has vowed to continue governing after the tight election this month, has endorsed the pipeline, which also won approval from the federal government.
“The decision we took on the Trans Mountain pipeline was based on facts and evidence,” Prime Minister Justin Trudeau said Tuesday in Rome. “Regardless of a change in government in British Columbia, or anywhere, the facts and evidence do not change.”
Houston-based Kinder Morgan spun out its Canadian unit, whose assets include the Trans Mountain pipeline, after scrapping plans to sell a minority stake in the business.
Kinder Morgan Canada originally priced the shares at between C$19 and C$22 before scaling back to C$17 last week, though it still reached its target by selling more shares than planned.
Construction on the expansion project is due to start in September and should be completed by December 2019, according to a regulatory filing. The pipeline’s capacity has been oversubscribed since 2010 and upon completion, 80 percent of its capacity will be under long-term contracts, Kinder Morgan said in a filing.
Kinder Morgan Canada is one of the largest IPOs in Canadian history, and the biggest since Hydro One Ltd. raised C$1.83 billion in its IPO in October 2015.