The Alberta government’s ambitious timeline for the potential construction of a new West Coast oil pipeline faces numerous challenges, according to analysts at CIBC World Markets. The province aims to submit a proposal to the federal major projects office by July 1, have it designated a project of national interest by Oct. 1, and commence construction as early as Sept. 1, 2027. Oil flow could start around 2033 or 2034, as stated by a provincial official during a recent media briefing.
The analysts, Robert Catellier and Rogan Anantharajah, expressed cautious optimism about the proposed timelines, considering them as best-case scenarios in a recent industry update. These targets were outlined by the Alberta government after finalizing an agreement with Ottawa on gradually increasing the market price on carbon to $130 a tonne by 2040.
One of the remaining agreements to be settled involves funding the multibillion-dollar Pathways carbon capture project, which is a prerequisite for the pipeline according to a federal-provincial memorandum of understanding. As of now, no private-sector entity has emerged to take on the financial risk and cost of the pipeline project. However, top pipeline executives are advising the province on technical aspects, such as routing options.
The proposed pipeline aims to transport up to one million barrels per day of oilsands crude to the West Coast, potentially doubling the existing capacity to reach Asian markets through the Trans Mountain pipeline. The Alberta government favors a northern port option due to its proximity to Asia, but negotiations with British Columbia, consultations with Indigenous groups, and clarity on the oil tanker loading ban in northern B.C. are still pending.
ATB Financial chief economist Mark Parsons highlighted the positive signal sent by the clear construction timelines for the pipeline, emphasizing the importance of timely completion. ATB estimates suggest that the Pathways project and expanded pipeline capacities could significantly boost Canada’s and Alberta’s GDP between 2027 and 2035.
The stakeholders involved are working towards overcoming the challenges and securing necessary agreements to advance the project.
