The Keystone XL pipeline will create thousands of new jobs, billions in economic stimulus and enhanced North American energy security
The Government of Alberta has finalized an agreement with Calgary-based TC Energy Corporation to provide financial support to accelerate construction of the Keystone XL Pipeline, as of April 1.
The investment will include $1.5 billion in equity investment in 2020 followed by a $6 billion loan guarantee in 2021.
The Keystone XL Pipeline is expected to be completed and in service in 2023.
This agreement is the culmination of six months of negotiations, as well as rigorous vetting by government officials and outside industry experts to ensure the success of this project, while minimizing risk to taxpayers.
The government is backstopping the project to enable TC Energy to begin immediate construction on the Alberta portion of the pipeline. This will ensure the earliest possible date of completion. The project will create more than 1,400 direct and 5,400 indirect jobs in Alberta during construction and will generate an estimated $30 billion in tax and royalty revenues for future generations of Albertans and Canadians.
“We cannot wait for the end of the pandemic and the global recession to act. There are steps we must make now to build our future focused on jobs, the economy and pipelines. Today we are moving forward with a project that is essential to our future prosperity,” said Alberta Premier Jason Kenney.
“This investment in Keystone XL is a bold move to re-take control of our province’s economic destiny and put it firmly back in the hands of the owners of our natural resources, the people of Alberta. The Government of Alberta is confident that this is a wise investment. After construction is complete, we will be able to sell our shares at profit. In addition, the project will have a net return of over $30 billion to the Alberta taxpayer through royalties and higher prices for Alberta oil in the next 20 years.”
At 1,947 km in length, the Keystone XL Pipeline will be capable of safely delivering 830,000 barrels per day of crude oil from Hardisty, Alberta to Steele City, Nebraska where it will connect with TC Energy’s existing facilities to reach U.S. Gulf Coast refiners.
“We appreciate the ongoing backing of landowners, customers, Indigenous groups and numerous partners in the US 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 president and chief executive officer. “In addition, we thank US 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.”
Keystone construction during COVID-19
With construction taking place during to COVID-19 pandemic, Girling added TC Energy will take guidance from all levels of government to determine safe practices for construction crews.
“Construction will advance only after every consideration for the health and safety of our people, their families and of those in the surrounding communities has been taken into account,” Girling said.
The Keystone XL Pipeline is underpinned by new 20-year transportation service agreements for 575,000 barrels per day with a group of strong, credit-worthy counterparties which are expected to generate approximately US$1.3 billion of earnings before interest, taxes, depreciation and amortization on an annual basis.
As well, once the Keystone XL Pipeline is in service, current contracts for 115,000 barrels per day from Hardisty to the Gulf Coast on the existing Keystone line will shift to the new facilities under renewed 20-year contracts.
Keystone XL Pipeline highlights
- Thousands of well-paying jobs during construction.
- Advances continental energy security.
- Tens of millions in property and income taxes through every year of operation.
- Six comprehensive scientific reviews by the U.S. Department of State over the past decade concluding that the project can be built and operated in an environmentally sustainable and responsible way.
- Safer and less-GHG intensive than current methods of transporting crude oil to market.
- Thousands of stakeholders engaged, including landowners, community members and Indigenous communities.