On March 31st Premier Jason Kenny announced funding for the Keystone XL pipeline, with a $1.5 billion equity investment to Calgary-based TC Energy Corporation and said construction will officially begin today (April 1, 2020). 

During his conference, Kenney stated, “Today, we are taking action that looks beyond COVID, to a better future for Canada’s energy industry, and everyone who depends on it.”

Lacombe-Ponoka MLA Ron Orr said lots of people are still processing the idea, and although there are “people sitting on both sides of the understanding”, he said this is a major step forward for Alberta.

“This is extremely important for the Alberta government because this is probably the last major pipeline that will ever get built. The challenges of our world - there’s just not going to be anyone else who is willing to step up and try and make the major commitments of finance,” Orr said. 

Orr explained the role of Alberta’s government in this project is to provide some financial support but also to offer a sort of political support with the 2021 loan guarantee of an additional $6 billion if needed. 

“Specifically, what that means is we are contributing $1.5 billion at this current time to the project, and then there is a future loan guarantee- which doesn’t directly cost the government money - it’s a political assurance to TC that they will be able to go ahead, and the province’s commitment is capped at that.,” he said. 

He went on to explain that through the negotiations and legal processes, it was made very clear that the Alberta Government would not be contributing any more than that potential combined total of $7.5 billion. 

The project will run from Hardisty, Alberta, to Steele City, Nebraska and will cover 1,947 kilometres. Premier Kenney said the construction and operation of the pipeline will create a total of approximately 7,000 jobs for Albertans. 

“The Premier’s real motivation here is that this is our last opportunity. If we didn’t’ do this, we throw away an incredible opportunity for Albertans,” Orr said. 

“The reality is that this has the potential to generate 30 billion dollars in increased royalties over the next 20 years for Alberta taxpayers. That’s an extremely important piece as to why we’ve gone ahead and done this," he said, adding that he has heard confirmation from multiple ministers that construction will officially begin today.

Orr added that about 95 per cent of the capacity of the pipeline that has already been contracted out to use, which provides a significant amount of assurance that the pipeline will be operational and profitable very quickly after the completion of the project. 

The pipeline is expected to be operational by 2023. 

To view the full release published the Alberta Government on March 31st, click here. 

Project Details

  • KXL will provide more than 830,000 barrels per day of crude oil to Gulf Coast Refineries
  • Covers 1,947 kilometres from Hardisty, Alberta, to Steele City, Nebraska
  • 259 kilometres of pipelines will be constructed in Alberta
  • At least 6,800 direct and indirect jobs in Alberta and over 15,000 direct and indirect jobs in Canada
  • Project is expected to be completed in 2023

Financial details (CDN$)

  • Government of Alberta will contribute up to $1.5B (CAD) in equity investment in 2020
  • The government will backstop this project with a $6 billion loan guarantee in 2021
  • TC Energy will reimburse the government of Alberta 12 months after oil is flowing through the pipeline

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