×

UPDATE 2-Kinder Morgan's Trans Mountain needs permits, but on schedule

(New throughout, adds comments from company president)

CALGARY, Alberta, July 19 (Reuters) - Kinder Morgan Canada Ltd's Trans Mountain pipeline expansion still needs "a good number" of local permits, but the project remains on schedule for construction in September, company President Ian Anderson said on Wednesday.

Trans Mountain's fate had grown more uncertain since last month's rise of a new provincial government in Canada's British Columbia that is against the line's expansion through the province.

On a conference call with analysts, Anderson declined to speculate on what the new government would do, but said he remained confident in the project and looked forward to meeting with British Columbia's new Premier John Horgan.

When asked whether the company has included any slack in the construction timeline to accommodate delays, Anderson said most work this year will be preparations for major construction in 2018.

"That was always the plan," he said. "Permit acquisition and the priority of permitting activities is built around that."

The company posted lower-than-expected quarterly profits on Wednesday. It was its first earnings report after being spun off from Houston's Kinder Morgan Inc, a move made in part to finance the Trans Mountain expansion.

The expansion almost triples the capacity of the existing pipeline, designed to carry crude from Canada's oil sands to the West Coast.

While the province cannot override Trans Mountain's federal approval, it can raise obstacles for the project, delaying it and wearing down the will of Kinder Morgan's investors, experts have said.

Anderson said Kinder Morgan has made its first order for steel for the Trans Mountain expansion and will finalize construction contracts by mid-August.

The company said it expects the Trans Mountain pipeline expansion to be on schedule to be in service by the end of 2019.

Kinder Morgan Canada reported net income of C$25.1 million ($19.9 million), or 11 Canadian cents per share, in the second quarter ended June 30, below analysts' average estimate of 14 Canadian cents per share, according to Thomson Reuters I/B/E/S.

The company reported revenues of C$168.7 million, up from C$165.8 million for the same period last year. It said it expects to generate 2017 earnings before taxes and other deductions of just under C$400 million.

($1 = 1.2594 Canadian dollars) (Reporting by Ethan Lou; Editing by Jim Finkle and David Gregorio)