Don't count your chickens before they are hatched.I suppose everyone is wondering what I am talking about with such a tag-line so I guess I had better clarify what I mean by it.
Basically, even though KML and the Canadian Government consider the buy out of the Trans-Mountain assets pretty much a done deal and investors are gleefully dreaming about what KML will do with the $4.5 Billion that they are going to receive from the Canadian Government as a result of the sale there is one little technicality that could put a wrench into the whole plan and pushing the whole thing back to square one. That little technicality is the Donald Trump factor. As President of the United States and with KML being a USA corporation, Donald Trump has the power to veto the deal and, site National Security as the reason as he has done when impossing tariffs on goods entering the United States.
Not of course to presume I know what the man is thinkingbut, I am of the opinion that Donald kind of likes the present arrangement that the United States has with Canada regarding the flow of oil. The United States sells their own oil at the WTI price and buys Canadian oil at the discounted price which is, frankly, killing us. So the US is making full price for every Us barrel it sells on the world market and only pays Canada, depending on the WTI discount at time of purchase, at, for example, $35.00 to $40.00 a barrel thus making a profit of, for example, $25.00 to $40.00 per barrel when you weigh what they made selling their oil per barrel and what they paid for ours. Secondly, Donald is not likely to stand by and watch that nice dicounted oil being redirected to another country. He wants it all for the United States and why wouldn't he when the USA is making money off of Canada. That's a pretty sweet deal. So, I fully expect him to say, "NO, NO, NO" to the deal. If he does, that puts the ball back in KML's court and Justin Trudeau squirming and trying to figure out how to build a pipeline without having to arrest someones grandmother at a pipeline protest rally in BC especially with a federal election on the horizon and being unable to quarantee Kinder Morgan that there will be no interference during construction. Finally, the ironic thing about it all is that if President Trump vetos the sale the enviromental groups, who absolutely despise the man, could end up having to be greatful to him for doing what they couldn't do. Put the brakes on the whole thing.