CALGARY — TC Energy Corp. is proceeding with its long-delayed Keystone XL pipeline with a US$1.1 billion “strategic investment” from the Alberta government.
The province is making a preferred equity investment in the 830,000-barrels-per-day pipeline project that would carry oil from Alberta to the U.S. Gulf Coast, which is home to the largest concentration of heavy oil refineries in the world.
This is absolutely critical for our economic future now more than ever
Alberta Premier Jason Kenney
In an interview with the Financial Post, Kenney said the company will begin construction on the long-delayed pipeline export project as early as April 1.
“This is absolutely critical for our economic future now more than ever,” Kenney said on Monday.
As part of the funding plan, the Government of Alberta has agreed to invest approximately US$1.1 billion as equity in the project, which substantially covers planned construction costs through the end of 2020. The remaining capital investment of approximately US$6.9 billion is expected to be largely made in 2021 and 2022 and funded through the combination of a US$4.2 billion project level credit facility to be fully guaranteed by the Government of Alberta and a US$2.7 billion investment by TC Energy.
TC Energy Corp., the Calgary-based pipeline giant that has been trying to build Keystone XL for a decade, has already spent $6 billion advancing the project, Kenney said.
Any cost overruns will be paid by TC Energy, Kenney said, adding the government’s exposure to the project is limited to the $7.5 billion in preferred equity and loan guarantees.
“It’s a real, concrete vote of confidence in the future of the Canadian energy sector. We are in a crisis environment with a crash in prices but the pandemic will end and global demand will return,” Kenney said. “When we reach that point, we absolutely must have a major pipeline in commission.”
TransCanada’s Keystone XL pipeline has faced legal holdups amid staunch opposition from environmental groups and landowners.
Andrew Burton/Getty Images files
Oil prices have crashed in the last month as the coronavirus pandemic has caused a dramatic fall in global demand for oil. At the same time, Saudi Arabia and Russia have flooded the market with crude as they engage in a price war.
However, Kenney said, the price war in the middle of a health crisis “highlights now more than ever why we need energy independence” and an interconnected North American oil and gas market.
“We appreciate the ongoing backing of landowners, customers, Indigenous groups and numerous partners in the U.S. and Canada who helped us secure project support and key regulatory approvals as this important energy infrastructure project is poised to put thousands of people to work, generate substantial economic benefits and strengthen the continent’s energy security,” said Russ Girling, TC Energy’s chief executive officer.
“In addition, we thank U.S. President Donald Trump and Alberta Premier Jason Kenney as well as many government officials across North America for their advocacy without which, individually and collectively, this project could not have advanced.”
TC Energy had previously signalled its willingness to sell a stake in Keystone XL as it’s already working on other projects valued at $20 billion.
Company executives said in an earnings call Feb. 13 that TC Energy had acquired all of the land and right-of-ways needed to build the project through the U.S., and had permits in place from the U.S. federal government.
They also have commitments from oil producers to fill the project once it’s complete in June 2023.
“Keystone XL today is fully contracted,” TC Energy executive vice-president and president, liquids pipelines, Paul Miller said on the same earnings call. “It’s fully contracted with the major producers in Alberta, the creditworthy companies.”
In a January court filing, the company indicated it planned to begin work on the section of the Keystone XL pipeline that crosses the Canada/U.S. border in April. At the time, the company said it intended to begin work in Montana and South Dakota in April, followed by work in Nebraska in June.
TC Energy, formerly known as TransCanada Corp., has been looking to build the 830,000-barrels-per-day pipeline – which was rejected by former U.S. president Barack Obama then approved by President Donald Trump – for more than 10 years.
We’re not prepared to bet a huge part of our economic future on one project
Alberta Premier Jason Kenney
As Keystone XL begins construction on April 1, Kenney said the Alberta energy industry needed more assurance for future growth than just one new export pipeline, referring to the federally owned Trans Mountain expansion project, which is currently under construction through British Columbia.
“We’re not prepared to bet a huge part of our economic future on one project. This is our hedge that we get at least one major project built. That will ensure the flexibility for our shippers and the future of the Canadian energy sector,” Kenney said.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
