The Alberta government has set an ambitious timeline for the potential construction of a new West Coast oil pipeline, as per analysts at CIBC World Markets. The province plans to submit a proposal to the federal major projects office by July 1, seek project designation by Oct. 1, and commence construction as early as Sept. 1, 2027. Oil flow could start around 2033-2034, according to a provincial official.
CIBC analysts, Robert Catellier and Rogan Anantharajah, consider these timelines optimistic and reflective of a best-case scenario. The Alberta government revealed these targets after finalizing an agreement with Ottawa on increasing the market price of carbon to $130 a tonne by 2040.
The remaining agreement required for the pipeline is related to funding the Pathways carbon capture project, involving the province, federal government, and industry players represented by the Oil Sands Alliance. The Alberta government is leading the pipeline application, as no private-sector entity has yet taken on the risk and cost.
While some pipeline companies are open to participating, several conditions need resolution to support the significant investment required in production, carbon capture, and the pipeline. The pipeline’s objective is to transport up to one million barrels per day of oilsands crude to the West Coast, aiming to more than double the current volumes reaching Asian markets through the existing Trans Mountain pipeline.
The Alberta government prefers a northern port option due to the shorter shipping distance to Asia. Pending issues include negotiations with British Columbia, consultations with Indigenous groups, and clarification on the ban on oil tanker loading on the northern B.C. coast.
Despite challenges, the clearer construction timelines for the pipeline are seen as a positive development by ATB Financial chief economist Mark Parsons. According to ATB estimates, the Pathways project and planned expansions to existing pipelines could significantly boost Canada’s and Alberta’s real GDP between 2027 and 2035.
The potential economic impact of these projects, if successfully executed, represents a substantial upside to Alberta’s forecast and the Canadian economic outlook.