Kinder Morgan Inc. (TSX: KML) is pulling out of Canada.
The U.S. pipeline operator has hired investment bank TD Securities to facilitate a sale of its Calgary-based Canadian business, which could fetch as much as $2.4 billion, according to a weekend report by newswire Reuters.
The move to sell its Canadian operations comes weeks after Kinder Morgan closed its sale of the Trans Mountain pipeline to the Canadian government for about $4.5 billion. Ottawa now owns the controversial pipeline project that would move crude oil from Alberta to the coast of British Columbia.
Earlier in September, Kinder Morgan Chief Executive Officer Steven Kean indicated his willingness to sell the rest of the Canadian business and leave Canada altogether.
News of the asset sale sent shares in Kinder Morgan Canada Ltd. up 3.7% to a three-month high. Pipeline companies in Canada have faced opposition from environmental groups and First Nations in getting necessary regulatory approval for new projects.
Last month, a Canadian court overturned approval of the Trans Mountain expansion, saying that Ottawa failed to adequately consider aboriginal concerns. Prime Minister Justin Trudeau said last week that his government is now considering introducing legislation in Parliament to get the project back on schedule.
Kinder Morgan’s remaining Canadian business includes the Edmonton, Alberta and Vancouver Wharves terminal businesses, as well as the Canadian portion of the Cochin pipeline. The Canadian unit has earnings before interest, tax, depreciation and amortization of about $200 million, the company said in a written statement.
