Canada is accelerating a proposed oil pipeline with a capacity of one million barrels per day towards the Pacific coast. This project will provide Alberta with access to Asian markets and reduce its dependence on the U.S. market.
Project Details
Mark Carney, the Prime Minister of Canada, announced on Thursday that Ottawa has declared this project as one of the national projects and intends to advance it through a single federal review process. This process is expected to conclude by September 1, 2027, and construction permits are likely to be issued soon after.
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Cost and Economic Impacts
The pipeline will run from Alberta to southern British Columbia and will primarily follow the existing Trans Mountain corridor. Trans Mountain and Pembina Pipeline will lead this project, and it is expected that the federal and Alberta governments will hold the majority of the shares. Indigenous communities will receive at least 10 percent ownership of the project. Alberta estimates that the construction cost of this project will be between 35.2 and 43.7 billion Canadian dollars.
Ottawa has stated that this project could contribute over 20 billion Canadian dollars to annual GDP, create up to 140,000 jobs at peak construction, and generate 100 billion dollars in government revenue by 2060.
Current Oil Market Status
Canada still sends over 90 percent of its crude oil exports to the United States. Its main escape route is the Trans Mountain pipeline, which has a capacity of 890,000 barrels per day and currently operates at maximum capacity. Access to the Pacific has become more valuable since the war with Iran disrupted Middle Eastern oil flows and pushed Asian refiners to seek barrels that do not need to pass through the Strait of Hormuz.
China is recognized as the largest buyer of Trans Mountain's marine exports, accounting for about 60 percent of the shipments. Ottawa and Alberta are also pursuing an increase in capacity of 300,000 to 400,000 barrels per day in the existing Trans Mountain system. This new pipeline still requires a final route, regulatory approvals, and consultations with Indigenous communities and British Columbia.
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