The Alberta government has set an ambitious timeline for the potential construction of a new West Coast oil pipeline, with various challenges to overcome, 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 potentially commence construction as early as Sept. 1, 2027. Oil flow could begin around 2033 or 2034, as per a provincial official during a recent media briefing.
CIBC analysts Robert Catellier and Rogan Anantharajah described the timelines as optimistic and based on a best-case scenario in a Monday industry update. The Alberta government revealed these targets following the finalization of an agreement with Ottawa on increasing the market price of carbon to $130 a tonne by 2040 as part of the energy accord signed late last year.
One remaining agreement to be resolved involves the funding of the multibillion-dollar Pathways carbon capture project, a prerequisite for the pipeline according to a federal-provincial memorandum of understanding. The Alberta government is leading the pipeline application process, as no private-sector entity has yet committed to bearing the risk and cost. However, top pipeline executives are assisting the province with 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 capacity to reach Asian markets compared to the existing Trans Mountain pipeline. The Alberta government favors a northern port option due to the shorter shipping distance to Asia.
Despite progress, negotiations with British Columbia, consultations with Indigenous communities, and concerns over the ban on oil tanker loading on the northern B.C. coast remain unresolved. B.C. Premier David Eby, coastal First Nations, and environmental groups have reiterated their opposition to potential changes to the tanker ban.
ATB Financial chief economist Mark Parsons noted that the clarified construction timelines for the pipeline send a positive signal and should create pressure for timely execution. ATB estimates suggest that Pathways and additional pipeline capacity expansions could significantly boost both Canada’s and Alberta’s real GDP between 2027 and 2035 if implemented.