The Alberta government’s proposed timeline for commencing construction on a potential new West Coast oil pipeline is seen as ambitious, but faces numerous challenges ahead, according to analysts at CIBC World Markets. The province aims to present a proposal to the federal major projects office by July 1, secure its designation as a project of national interest by Oct. 1, and begin construction as early as Sept. 1, 2027. Oil flow is projected to start around 2033 or 2034, as per a provincial official briefing.
CIBC analysts Robert Catellier and Rogan Anantharajah view these timelines as optimistic and indicative of a best-case scenario. The Alberta government outlined these targets after reaching an agreement with Ottawa on increasing the carbon market price to $130 per tonne by 2040. The final agreement to be settled involves the funding of the multibillion-dollar Pathways carbon capture project, which is a prerequisite for the pipeline.
The Alberta government is taking the lead on the pipeline application due to the lack of private-sector interest in assuming the associated risks and costs. Although no private entities have stepped up, top pipeline executives are assisting the province with technical aspects and routing options. A national-interest designation would facilitate a speedy 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, significantly increasing the current capacity to reach Asian markets. The government favors a northern port option for its shorter shipping distance to Asia. However, unresolved issues include the Pathways project, negotiations with British Columbia, consultations with Indigenous groups, and concerns regarding the ban on oil tanker loading on the northern B.C. coast.
Despite the remaining challenges, ATB Financial chief economist Mark Parsons believes that the clarity provided on the construction timelines is a positive development that could expedite progress. ATB estimates suggest that the Pathways project and planned pipeline expansions could boost Canada’s real GDP by 1.1% and Alberta’s real GDP by 5.1% between 2027 and 2035, providing a significant economic upside if successfully implemented.