The Alberta government’s proposed timeline for the potential construction of a new West Coast oil pipeline is ambitious but faces several challenges ahead, according to analysts at CIBC World Markets. The province plans to submit a proposal to the federal major projects office by July 1, seek national interest designation by Oct. 1, and potentially commence construction as early as Sept. 1, 2027. Oil flow is projected to start around 2033 or 2034, as indicated by a provincial official during a recent media briefing.
CIBC analysts Robert Catellier and Rogan Anantharajah described the proposed timelines as optimistic and reflective of an ideal scenario. The Alberta government revealed these targets following the finalization of an agreement with Ottawa on gradually increasing the market price of carbon to $130 per tonne by 2040.
One key outstanding agreement involves the funding of the Pathways carbon capture project, which is crucial for the proposed pipeline. Currently, the Alberta government is leading the pipeline application process, with no private-sector entity stepping up to assume the associated risks and costs. Top pipeline executives are advising the province on various technical aspects, including potential routing options, with the aim of facilitating a swift approval process under a national-interest designation.
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 its shorter shipping distance to Asia.
Despite progress on the carbon pricing deal, unresolved issues include negotiations with British Columbia, consultations with Indigenous groups, and clarity on the ban on oil tanker loading in northern B.C. Coastal areas. B.C. Premier David Eby, coastal First Nations, and environmental organizations have strongly opposed any potential relaxation of the tanker ban.
ATB Financial’s chief economist, Mark Parsons, stated that the outlined construction timelines provide a positive signal and could expedite progress on the project. ATB estimates that the Pathways project and additional pipeline expansions could significantly boost Canada’s and Alberta’s GDP between 2027 and 2035, presenting a substantial upside potential for both the provincial and national economies.