Premier Jason Kenney announced the Government of Alberta is investing over a billion dollars into the Keystone XL Pipeline project
The province will be putting forward $1.5 billion in equity investment in the Calgary-based TC Energy Corporation project in 2020, followed by a $6 billion loan guarantee in 2021. The money is in an effort to accelerate construction.
“This will ensure the earliest possible date of completion. The project will create over 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,” the province said in a news release.
The Premier said with the COVID-19 pandemic and an oil price war between Saudi Arabia and Russia hammering Alberta’s already struggling economy, the UCP government made the decision to invest in a project to create jobs and move Alberta crude.
“We’ve been hit hard with the worst public health crisis in over a century. At the same time, our economy is undergoing the largest contraction since the great depression with hundreds of thousands of layoffs,” said Kenney. “We’re coping with these challenges after five years of economic stagnation.”
The agreement between the province and TC Energy was six-months in the making and Kenney said it was vetted by government officials and outside industry experts to minimize the risk to taxpayers and maximized the benefits of the investment.
At least 6,800 direct and indirect jobs in Alberta and over 15,000 direct and indirect jobs in Canada are expected to be created with the project.
“Construction will begin in Alberta immediately,” said Kenney. “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 focussed on jobs, the economy, and pipelines.”
The 1,947 kilometre pipeline from Hardisty, Alberta, to Steele City, Nebraska, will carry at least 830,000 barrels per day of Alberta crude. Construction will begin immediately in Alberta, at the Canada-US border, in Montana, South Dakota and Nebraska.
“The Government of Alberta is confident that this is a wise investment,” Premier Kenney said. “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.”
As part of the deal, the province said TC Energy will reimburse the Government of Alberta 12 months after oil is flowing through the pipeline. It’s expected to be operational by 2023.