The Alberta government’s proposed timeline for the potential construction of a new oil pipeline on the West Coast has been deemed ambitious by 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 is anticipated to start around 2033 or 2034, according to a provincial official.
CIBC analysts Robert Catellier and Rogan Anantharajah expressed cautious optimism, stating that while they appreciate the sense of urgency, the proposed timelines are optimistic and represent a best-case scenario. The Alberta government outlined these targets following the finalization of an agreement between itself and Ottawa on gradually increasing the market price of carbon to $130 per tonne by 2040.
The remaining agreement to be settled involves the province, federal government, and a consortium of industry players represented by the Oil Sands Alliance regarding funding for the multibillion-dollar Pathways carbon capture project. The Alberta government is leading the pipeline application process as no private-sector entity has yet come forward to take on the risk and costs. However, top pipeline executives are advising the province on technical aspects, including routing options.
The proposed pipeline aims to transport up to one million barrels per day of oilsands crude to the West Coast, significantly increasing the volumes that can reach Asian markets through the existing Trans Mountain pipeline. The Alberta government favors a northern port option due to its shorter shipping distance to Asia. Pending issues include finalizing the Pathways project, negotiations with British Columbia, consultations with Indigenous groups, and the ban on oil tanker loading on the northern B.C. coast.
Despite challenges, the clarity provided on the pipeline construction timelines has been viewed positively by ATB Financial chief economist Mark Parsons. He noted that the developments should create pressure to move the project forward. ATB estimates suggest that the Pathways project and expanded pipeline capacity could lead to a significant boost in real GDP for Canada and Alberta between 2027 and 2035.
Overall, the potential construction of the West Coast pipeline represents a substantial opportunity for economic growth in the region, pending successful execution of the proposed timelines and agreements.