September 29, 2017 / 5:38 PM / 2 years ago

Kinder Morgan Canada: ban on fish mats may delay pipe expansion

CALGARY, Alberta (Reuters) - Kinder Morgan Canada Ltd’s (KML.TO) Trans Mountain pipeline expansion may be delayed if the country’s energy regulator continues to bar it from installing anti-fish-spawning mats in construction areas, the company said late on Thursday.

A sign warning of the subterranean presence of Kinder Morgan's Trans Mountain Pipeline in seen in ranchland outside Kamloops, British Columbia, Canada November 16, 2016. REUTERS/Chris Helgren

The remarks, in a letter to the National Energy Board (NEB), mark a departure from the company’s long-standing public stance that the project remained on track despite mounting opposition and regulatory hurdles.

While Kinder Morgan Canada outlined political and regulatory risks to the expansion in a prospectus for its public offering in May, the company then described them as “standard” language.

The company, a unit of Houston-based Kinder Morgan Inc (KMI.N), said on Friday it was awaiting NEB’s final decision on the fish mats and would comply.

In Thursday’s letter, a Kinder Morgan lawyer asked for relief from an order last week that the company stop installing the fish mats - work that the regulator said had “not yet been authorized.”

The lawyer wrote that the mats, which are placed on the bottom of waterways to prevent fish from laying eggs, would ensure fish were not harmed by construction activity and were “key” to starting work.

If relief were not granted, some “installations may be delayed for a year, which would delay construction of the corresponding crossing by a full year, potentially impacting the project in-service date,” the lawyer wrote.

The company did not say how far beyond the late 2019 date its plan to start shipping oil on the expanded line could be delayed.

While the project has federal approval, the NEB has so far granted permission only for construction of a marine terminal.

The NEB said it was reviewing Kinder Morgan’s letter and that it would “take the time” in doing so to ensure the environment and public safety were protected.

The fish mats came to light in part due to a blog post by the company, the NEB has said.

When asked why the regulator had not asked Kinder Morgan to remove the mats already installed, a spokesman said the regulator’s assessment of the situation is still ongoing.

Backed by the energy sector, the project aims to nearly triple the capacity of the existing pipeline from Canada’s oil-rich Alberta to the west coast.

The expansion faces opposition from environmental and aboriginal groups and the provincial government of British Columbia, through which the pipeline passes.

A legal challenge to be heard next week could overturn Trans Mountain’s approval.

Editing by Diane Craft and Rosalba O'Brien

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