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Alberta regulator to review Greenpeace’s Kinder Morgan IPO challenge

The Alberta Securities Commission is reviewing an environmental group’s request to halt a $1.75-billion share sale that Kinder Morgan Inc. plans to help finance the expansion of its Trans Mountain pipeline.

CHRIS HELGREN/REUTERS

The Alberta Securities Commission is reviewing an environmental group's request to halt a $1.75-billion share sale that Kinder Morgan Inc. plans to help finance the expansion of its Trans Mountain pipeline.

Earlier this month, Greenpeace Canada sent a letter to the ASC, along with the Ontario Securities Commission and Canadian Securities Association, saying Kinder Morgan may have used outdated oil projections in its IPO prospectus. The ASC acknowledged receiving the challenge and will give it "the consideration we deem appropriate," according to an e-mailed statement from spokeswoman Alison Trollope.

Outdated projections "could potentially mislead investors by portraying an overly optimistic view of the international oil market," the letter said. Greenpeace also argued Kinder Morgan failed to make adequate climate-change disclosures.

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The ASC has regulatory authority over the public offering. Kinder Morgan did not immediately respond to request for comment.

Houston-based Kinder Morgan is seeking to raise the capital by offering the shares in Kinder Morgan Canada Ltd. at $19 to $22 apiece, and it would list the company on the Toronto Stock Exchange.

Kinder Morgan had been running a dual-track process, exploring both an IPO and a joint venture to finance the Trans Mountain expansion. In a regulatory filing earlier this month, the company said it was no longer looking into a joint venture.

The pipeline project, which won approval from the federal government and British Columbia, could face more opposition now that the BC Liberals may have been reduced to a minority government in the May 9 election.

The Trans Mountain Expansion Project is expected to provide crude producers with an additional 590,000 barrels a day of shipping capacity from Alberta's oil sands to the Pacific Coast, where it can be loaded onto ocean-going vessels. Construction is due to start in September, and the project is scheduled to be completed by December, 2019.

The existing pipeline's capacity has been oversubscribed since 2010, and upon completion of the expansion, 80 per cent of the enlarged line's capacity will be under long-term contracts, Kinder Morgan has said.

In addition to the Trans Mountain pipeline system, the Kinder Morgan Canada offering would include Kinder Morgan's Puget Sound, Jet Fuel, and Canadian Cochin pipeline systems, as well as its Vancouver Wharves Terminal and various facilities in Edmonton.

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Video: Pipeline protesters gather at Trudeau’s Seattle visit (The Canadian Press)
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