Keystone XL pipeline to move forward with Alberta funding

TC Energy is set to proceed with the construction of the $8bn Keystone XL pipeline project after the Government of Alberta agreed to invest roughly $1.1bn in equity investment in the project.

The 1,947km Keystone XL pipeline would carry 830,000 barrels per day (bpd) of crude from Alberta to the US Midwest.

It has been delayed for more than a decade by opposition from landowners, environmental groups and tribes.

According to Reuters, the investment by the Government of Alberta shows how Canada is providing financial support for the industry despite the oil price crash and other concerns, such as climatic change and the Covid-19 outbreak.

The remaining capital investment of about $6.9bn is expected to be made in 2021 and 2022. It will be funded through a combination of a $4.2bn project level credit facility guaranteed by the Alberta Government and TC Energy’s $2.7bn investment.

TC Energy president and CEO Russ Girling said: “We thank US President Donald Trump and Alberta Premier Jason Kenney, as well as many government officials across North America for their advocacy, without which, individually and collectively, this project could not have advanced.

“During construction, we will continue to take guidance from all levels of government and health authorities to determine the most proactive and responsible actions in order to ensure the safety of our crews and community members during the current Covid-19 situation.

“Construction will advance only after every consideration for the health and safety of our people, their families and of those in the surrounding communities has been taken into account.”

Pre-construction activities are currently underway and the pipeline is expected to become operational in 2023.

Last November, the TC Energy operations control centre reported the detection of a drop in pressure at the Keystone crude pipeline.

The Keystone Pipeline System covers an area of 4,250km and transports more than 20% of western Canadian crude oil exports to the US Midwest and Gulf Coast refineries.