Ottawa reaches agreement to start Trans Mountain work this summer: source

Finance Minister Bill Morneau has reached an agreement in principle with Kinder Morgan that a senior federal official says will allow the controversial Trans Mountain pipeline expansion project to go ahead this summer.

Lawyers and officials from both parties were still hammering out the final language and paperwork late Monday night in advance of a Tuesday morning announcement by the finance minister.

"What Morneau has negotiated will enable us to now go and get the pipeline built," said a senior government official with direct knowledge of the negotiations. "It's the beginning of getting it built."

Details of the announcement were being held close on Monday because Kinder Morgan is a publicly traded company and the pipeline discussions are subject to a non-disclosure agreement.

The government has looked at three options for moving the project forward.Morneaualready has announced that the federal government is willing to compensate Kinder Morgan or any other company for any financial losses caused by British Columbia's attempts to obstruct the project.

Ottawa could also buy, build and then sell the expansion once the work is complete. Or it could buy the project from Kinder Morgan and then put it on the market for investors willing to pick up the project and build it themselves.

The senior official would not say which of those options Morneau and the company have chosen to move the project ahead, but said the agreement would allow summer construction to go ahead this year.

Deadline looming

Morneau'sTuesday announcement comes justtwo days before the drop-dead date for the project set by Kinder Morgan. The company said it would have to have clarity on a path forward for the $7.4-billion projectby May 31 or it would walk away from construction.

The federal cabinet is expected to get a full briefing on the pipeline deal when it meets at the unusually early time of 7:30 am on Tuesday.

The timing of Tuesday's announcement will allow both Morneau and Prime Minister Justin Trudeau to speak to key business audiences with some clearer answers on next steps for the pipeline.

Trudeau is taking part in a Bloomberg event in Toronto on Tuesday afternoon where he is expected to talk about economic growth. Later in the day, Morneau will join the prime minister for a roundtable of business leaders.

On Wednesday, Morneau speaks to the Calgary Chamber of Commerce about securing the country's economic future. He then continues on to Whistler, B.C. to chair meetings of the G7 finance ministers and central bankers that will run through Kinder Morgan's May 31 deadline.