Originally published by Wendy Stueck for The Globe and Mail on June 8, 2021
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Pembina Pipeline Corp. PPL-T decrease has joined with an Indigenous-owned group to propose an offer for the Trans Mountain oil pipeline, marking the first time a major energy company has signalled its intention to bid for the line now being expanded.

Pembina has formed a 50-50 partnership with Western Indigenous Pipeline Group, or WIPG, a coalition of First Nations and Métis representatives from communities along the 1,150-kilometre route of the pipeline in Alberta and British Columbia. The partnership is called Chinook Pathways.

“Chinook Pathways wants to own 100 per cent of the pipeline – and then Pembina will own 50 per cent and Western Indigenous Pipeline Group will own 50 per cent,” Michael LeBourdais, executive vice-president and director of WIPG, said Tuesday.

He made the comments as a rival Indigenous-led bidding group, Project Reconciliation, said it also aims to own 100 per cent of Trans Mountain once the expansion phase is over.

Chinook Pathways’ proposed offer would benefit the First Nations along the route and, through teaming up with an established pipeline company, provide the control and oversight that Indigenous communities want to see in any equity investment, said Mr. LeBourdais, who is also Chief of Whispering Pines/Clinton Indian Band near Kamloops.

“The interest is in working together with Pembina to monitor the pipeline. When you ask these First Nations what is most important, it’s always the environment. Money comes in third or fourth,” Mr. LeBourdais said. “It’s not the driving force of trying to buy this pipeline.”

Calgary-based Pembina said it believes WIPG is the right group to own the pipeline because it is made up of communities that will be directly affected by the expansion. “We believe this plan will ensure Indigenous communities have equity participation and environmental oversight over the project while ensuring safe and reliable operations,” the company said in an emailed statement.

Energy-sector executives have expressed optimism that Indigenous ownership will help achieve some social acceptance for a long-delayed goal of expanding capacity to get more oil from Alberta to the Pacific Coast and into Asian markets. The $12.6-billion expansion is under construction following a series of court challenges and is expected to be completed in late 2022. It will nearly triple capacity of the existing pipeline to 890,000 barrels a day.

Ottawa paid Kinder Morgan Canada Ltd. $4.5-billion for Trans Mountain in 2018, as the company prepared to halt the project because of regulatory and court delays. A year later, Pembina bought the remainder of Kinder Morgan Canada and other assets from its U.S. parent company.

Several First Nations, including the Tsleil-Waututh Nation, remain deeply opposed to the Trans Mountain project, citing environmental risks, including possible spills and the impact off the Pacific coast of increased tanker traffic on endangered killer whales.

Mr. LeBourdais said WIPG has signed up about 30 First Nations and hopes to get up to 79 to join the effort. Canadian Imperial Bank of Commerce is acting as financial adviser and WIPG has received inquiries from prospective investors, he said. Ottawa has yet to say when bidding can begin.

“While we recognize that this is a competitive process, Pembina is pleased with the significant momentum WIPG has generated in signing agreements with Indigenous communities, and recognizes that there are many details, including commercial structure and financing options, that will need to be discussed with the Canadian government,” Pembina said.

As for Project Reconciliation, Robert Morin became its chair last month, replacing Delbert Wapass, the founding chairman. Mr. Morin said the group is also seeking full ownership.

“That was always the intent. The only difference is we want to start off with 75-per-cent ownership, working our way to 100 per cent,” he said in an interview.

Project Reconciliation has said it aims to bring at least 200 First Nation and Métis communities together to back a bid. Until recently, it had said it wanted a 51-per-cent stake, to be funded through a bond issue. The group has said it had lined up banks for the financing, but has yet to name them.

“Now we’ve changed because they are under full construction, other than the delay right now because of the environmental holdbacks,” Mr. Morin said.

In April, federal regulators ordered work to stop on a section of the expansion in Burnaby, B.C, for four months to protect hummingbird nests.

Indigenous ownership of major infrastructure projects is a necessary step in addressing past wrongs, including the legacy of residential schools, said Mr. LeBourdais, who has been posting accounts on social media in recent days from relatives who attended residential schools.

“This is putting into action the words of every government ever,” he said. “You don’t need to buy it for us. … We have the expertise to do this, we just need to be taken seriously.”

Pembina’s involvement in a Trans Mountain bidding group emerged as the company also announced it would buy a 50 per cent stake in the proposed Cedar LNG Project in British Columbia in partnership with the Haisla Nation.

In addition, it has launched a rival, $8.3-billion takeover offer for Inter Pipeline Ltd. Inter’s board has recommended shareholders accept the offer over a hostile bid from Brookfield Infrastructure Partners LP.