The Alberta government has set an ambitious timeline for the potential construction of a new West Coast oil pipeline, according to analysts at CIBC World Markets. The province plans to submit a proposal to the federal major projects office by July 1, aiming for it to be designated a project of national interest by October 1 and to commence construction as early as September 1, 2027. It is projected that oil could start flowing around 2033 or 2034, as mentioned by a provincial official during a recent media briefing.
CIBC analysts Robert Catellier and Rogan Anantharajah expressed optimism but cautioned that the proposed timelines are best-case scenarios. The Alberta government revealed these targets after finalizing an agreement with Ottawa to gradually increase the market price on carbon to $130 a tonne by 2040, as outlined in the energy accord signed last year.
The remaining agreement to be settled involves the federal government, the province, and the Oil Sands Alliance on funding the Pathways carbon capture project, which is a prerequisite for the pipeline project and vice versa. Currently, the Alberta government is leading the pipeline application process, as no private-sector entity has come forward to bear the risks and costs. However, top pipeline executives are assisting the province with technical aspects and routing options for the proposal.
The objective of the proposed pipeline is to transport up to one million barrels per day of oilsands crude to the West Coast, significantly increasing the capacity to reach Asian markets compared to the existing Trans Mountain pipeline. The Alberta government favors a northern port option due to its shorter shipping distance to Asia.
Despite progress on the carbon price deal, several conditions, including negotiations with British Columbia, consultations with Indigenous groups, and the ban on oil tanker loading on the northern B.C. coast, remain unresolved. B.C. Premier David Eby, coastal First Nations, and environmental organizations have reiterated their opposition to any potential relaxation of the tanker ban.
ATB Financial chief economist Mark Parsons highlighted that the clarity on construction timelines for the pipeline is encouraging and could spur progress. ATB estimates that the Pathways project and the expansion of pipeline capacity could have a significant positive impact on Canada’s and Alberta’s real GDP between 2027 and 2035. Parsons emphasized that this development presents a substantial upside to Alberta’s economic forecast and the broader Canadian outlook.