07/31/2012 04:09 EDT | Updated 09/30/2012 05:12 EDT

Kinder Morgan expected B.C. pipeline conditions similar to Enbridge: spokesman

KAMLOOPS, B.C. - Kinder Morgan (TSX:KMI), owner of the lesser known proposed pipeline project through British Columbia, says it will work toward fulfilling the demands the provincial government wants met before it will support the company's expansion plans.

But the company also says B.C.'s wish for greater compensation is between provinces.

Spokesman Andrew Galarnyk said the company wasn't caught off guard when Environment Minister Terry Lake said Kinder Morgan too must provide superior spill prevention and response systems before B.C. will consider its plan to expand the Trans Mountain pipeline, which runs from Alberta to Vancouver.

Those conditions are in line with those laid out last week by the B.C. government surrounding Enbridge's (TSX:ENB) proposed Northern Gateway project.

Galarnyk said Kinder Morgan intends to follow whatever guidelines the B.C. government puts in place.

"Our intention is to follow the processes that are established by all levels of government as part of this expansion and as you know, we're still in the early stages of our proposal," he said.

"We're going to work over the next several months to ensure that our proposal meets all the requirements to proceed."

Lake has also said B.C. must get a greater share of revenue from the project, but Galarnyk said that would have to be negotiated between Victoria and Alberta.

On Monday, Lake re-iterated that the province's five conditions for pipeline support apply to all projects.

Lake said not only does the province seek an unspecified "fair share" of the economic benefits of the pipeline to offset the financial costs of a potential oil spill, it is also looking for superior spill prevention and response measures.

"There can be billions of dollars that accrue to British Columbia or to the rest of Canada," he said. "But if we were to have an adverse event that we could not control, that we could not clean up or recover from, then British Columbians would say it's just not worth it."

Northern Gateway is a $6 billion project that has attracted much opposition from the provincial NDP and from aboriginal groups and environmentalists.

The Kinder Morgan project proposes a $4.1-billion expansion of its Trans Mountain pipeline, which runs from Alberta to Vancouver. The expansion is expected to increase tanker traffic in Vancouver's Burrard Inlet.

B.C.'s demands include a greater share of the revenue generated by pipeline projects to offset the risks to the province in the event of an oil spill in its waters and on land. The province also wants world-class safety regulations in place and wants Ottawa to underwrite some of the liability in the event of a massive oil spill.

A report jointly issued by Alberta, the federal government and Canadian Association of Petroleum Producers released Tuesday suggested, if approved, the Trans Mountain pipeline would guarantee 622,000 related jobs at its peak by 2025.

The report said Alberta will get the bulk of jobs and financial benefits of the pipeline, much like Northern Gateway would.

Alberta Premier Alison Redford has rebuffed B.C. Premier Christy Clark's demands for greater financial benefits for the province.

Redford said the sharing of royalties between Alberta and B.C. goes against Canada's tradition of allowing goods to flow freely across the country.

Federal environmental hearings are continuing for the $6-billion Northern Gateway project, which would flow crude from Alberta's tar sands to a port on B.C.'s north coast for export to Asia.

(CHNL)(The Canadian Press)