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Mar 31, 2020

Kenney aims to 're-take control' by investing US$1.1B in Keystone XL

Alberta buys stake in Keystone XL

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The Alberta government is investing US$1.1 billion (C$1.5 billion) in the Keystone XL pipeline, TC Energy Corp. said Tuesday, while confirming plans to proceed with the project.

The Calgary-based company said the province’s investment will cover planned construction costs through the end of the year. The remaining investment of US$6.9 billion is expected to be made over the next two years and funded through a US$4.2 billion project level credit facility that’s being guaranteed by the Alberta government, and a US$2.7-billion investment by TC Energy.

“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 TC Energy President and CEO Russ Girling in a release.

“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.”

In a separate release, Alberta Premier Jason Kenney said his government believes this is “a wise investment.”

“We cannot wait for the end of the pandemic and the global recession to act,” Kenney said. “There are steps we must make now to build our future focused on jobs, the economy, and pipelines.”

Kenney said the project will create over 1,400 direct and 5,400 indirect jobs in his province during construction, and estimates it will generate a return of over $30 billion to Alberta taxpayers through royalties and higher oil prices.

“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,” he said.

The pipeline, which which will boost shipments of crude from Alberta’s oil sands to U.S. Gulf Coast refineries, is expected to enter service in 2023. However, the company said construction for the project will continue only after the health and safety of its people and surrounding communities are taken into account, given the novel coronavirus pandemic.

“During construction, we will continue to take guidance from all levels of government and health authorities to determine the most proactive and responsible actions in order to ensure the safety of our crews and community members during the current COVID-19 situation,” Girling said.