TC Energy to begin construction of long-delayed Keystone XL pipeline
On the 31st March, TC Energy announced that it would go ahead with the construction of its Keystone XL pipeline after the Alberta government committed to investing US$1.1 billion into the US$8 billion project.
The pipeline, which will be 1,210 miles (1,947 kilometres) in length and carry around 830,000 barrels of crude oil per day, has been delayed for years after opposition from landowners, environmental groups and tribes.
Keystone XL would carry crude from Hardisty, Alberta to Steele City, Nebraska in the US where it will connect with TC Energy’s existing facilities to reach US Gulf Coast. TC Energy said that with pre-construction activities underway, the pipeline is expected to enter service in 2023.
The Government of Alberta’s US$1.1 billion investment substantially covers the planned construction costs through the end of 2020. The remaining capital investment of approximately US$6.9 billion is expected to be largely made in 2021 and 2022 and funded through the combination of a US$4.2 billion project level credit facility to be fully guaranteed by the Government of Alberta and a US$2.7 billion investment by TC Energy.
Oil-rich Alberta said that construction on the Canadian portion of the line could start as soon as this week. In a statement, Alberta Premier Jason Kenney said: “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. Today we are moving forward with a project that is essential to our future prosperity.”
TC Energy had planned to begin construction in February but said there was too much uncertainty to begin construction on the project. Russ Girling, TC Energy’s President and Chief Executive Officer, said: “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. 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.”
Once the project is completed and placed into service, TC Energy expects to acquire the Government of Alberta’s equity investment under agreed terms and conditions and to refinance the US$4.2 billion credit facility in the debt capital markets.
“Strong commercial and financial support positions us to prudently build and fund the Project, along with our existing US$30 billion secured capital programme, in a manner that is consistent with maintaining our strong financial position and credit metrics,” Mr Girling added.
Source: HazardEx Magazine