The Canadian government said onTuesday it will buy Kinder Morgan Canada Ltd's TransMountain pipeline project for C$4.5 billion but does not intendto be the long-term owner of the project, which has faced fierceenvironmental opposition.
Canada will also offer federal loan guarantees to ensureconstruction continues through the 2018 season as part of thedeal with the company, a unit of Houston-based Kinder Morgan Inc .
"The federal government has reached an agreement with KinderMorgan to purchase the existing Trans Mountain pipeline, andinfrastructure related to the Trans Mountain expansion project,"Finance Minister Bill Morneau told reporters.
"So our message today is simple: when we are faced with anexceptional situation that puts jobs at risk, that puts ourinternational reputation on the line, our government is preparedto take action," he said.
The company had set a May 31 deadline to decide if it wouldproceed with the expanded line from Edmonton, Alberta, to a portin the Vancouver area, which would give landlocked Canadiancrude greater access to foreign markets.
Kinder Morgan set the deadline in part due to frustrationswith delays caused by the British Columbia government, which isconcerned about possible oil spills.
(Reporting by David LjunggrenEditing by Jeffrey Benkoe)