WINNIPEG, Manitoba (Reuters) - The Canadian government’s optimism that outside investors would be interested in taking over a Kinder Morgan Canada (KML.TO) oil pipeline project if the company pulls out might be misplaced, said energy industry sources and analysts.

Canada's Finance Minister Bill Morneau listens to a question during a news conference about the state of the Kinder Morgan pipeline expansion in Ottawa, Ontario, Canada, May 16, 2018. REUTERS/Chris Wattie

Finance Minister Bill Morneau said on Wednesday that Canada was prepared to cover some losses the firm might suffer if the proposed C$7.4 billion ($5.8 billion) expansion of its Trans Mountain line was delayed and predicted “plenty of investors would be interested” in stepping in if need be.

Kinder Morgan Canada has said it will ditch the Trans Mountain expansion by May 31 unless Ottawa dispels the uncertainties over the project, which the provincial government in British Columbia strongly opposes on environmental grounds.

A Canadian energy industry source who was not authorized to speak publicly about the matter said Morneau’s comments about potential new investors were puzzling.

U.S. companies are likely more focused on easing pipeline bottlenecks south of the border and are not interested in taking on the Trans Mountain project, which still faces fierce opposition, the source said. Hundreds of people have been arrested in Burnaby, the British Columbia port where the pipeline ends.

“It doesn’t matter who the owner is, even if it’s the federal government, you’re not getting the grandma off the picket line in Burnaby,” said the source.

A Calgary, Alberta-based oil trader said Morneau’s assurances struck the wrong chord.

“I don’t want the government involved in owning or funding a pipeline. Two governments from now, who knows what they would do with it? Just the

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