Alberta to propose new oil pipeline to Canada's west coast

[Three Pipeline Reflecting Blue Sky]
zorazhuang/iStock via Getty Images

Alberta's provincial government said Wednesday it will develop and submit a formal application to Canada's federal Major Projects Office for a new bitumen pipeline [https://www.alberta.ca/release.cfm?xID=9402446DF7F78-BE10-9A06-93CA2221F089D626] to carry as much as 1 million bbl/day to the British Columbia coast, even though no private company has committed to build the project.

Alberta said it will commit C$14 million and act as the formal proponent for the proposal, taking the lead on early planning and engineering work aimed at determining the route, size and cost of a pipeline; if the project is approved, the province would seek private capital to own it.

Canadian pipeline companies Enbridge (NYSE:ENB [https://seekingalpha.com/symbol/ENB]), South Bow (NYSE:SOBO [https://seekingalpha.com/symbol/SOBO]), and government-owned Trans Mountain agreed to provide advice and technical support, although none of the companies have committed to building or investing in the project, and Alberta Deputy Energy Minister Larry Kaumeyer said the government has no intention of building or owning a pipeline.

"The objective of the Alberta government is to get it to the starting gate," Kaumeyer said, adding that in spite of growing Canadian oil production, no private sector company is willing to take the risk of proposing a pipeline project.

Canada currently sends 90% of its oil exports to the U.S. but is now trying to diversify oil exports in part to protect its economy against tariffs.

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