The Alberta government’s proposed timeline for the potential construction of a new West Coast oil pipeline is ambitious but faces various hurdles, according to analysts at CIBC World Markets. The province plans to submit a proposal to the federal major projects office by July 1, seeking national interest designation by Oct. 1, and aiming to start construction as early as Sept. 1, 2027. Oil flow may commence around 2033 or 2034, as per a provincial official briefing last week.
CIBC analysts Robert Catellier and Rogan Anantharajah described the timelines as optimistic and representing a best-case scenario, noting a sense of urgency in the government’s approach. The targets were outlined after Alberta and Ottawa finalized an agreement on gradually increasing the market price of carbon to $130 per tonne by 2040.
The remaining agreement to finalize involves the province, federal government, and industry players represented by the Oil Sands Alliance on funding the multibillion-dollar Pathways carbon capture project, a prerequisite for the pipeline. While no private-sector entity has yet emerged to bear the project’s risk and cost, top pipeline executives are advising the province on technical aspects and routing options. A national-interest designation would ensure a swift approval process through the federal major projects office.
The proposed pipeline aims to transport up to one million barrels of oilsands crude daily to the West Coast, potentially more than doubling current volumes reaching Asian markets via the existing Trans Mountain pipeline. The Alberta government favors a northern port option due to the shorter shipping distance to Asia.
Outstanding issues include finalizing the Pathways project, negotiating with British Columbia, consulting with Indigenous groups, and addressing the ban on oil tanker loading on the northern B.C. coast. Despite objections from various stakeholders, the clarity on construction timelines has been viewed positively, with ATB Financial estimating potential economic benefits from Pathways and expanded pipeline capacity.
ATB’s chief economist, Mark Parsons, highlighted the positive impact of increased clarity on pipeline construction timelines, emphasizing the potential economic boost for Alberta and Canada if executed successfully.
