CALGARY — TC Energy Corp. gave the go ahead for construction of its US$8-billion Keystone XL Pipeline project on Tuesday, with a helping hand from the Alberta government.
The company said Alberta has agreed to invest approximately US$1.1 billion as equity in the project, which substantially covers planned construction costs through the end of 2020.
The remaining US$6.9 billion is expected to be funded through a combination of a US$4.2-billion project level credit facility to be fully guaranteed by the Alberta government and a US$2.7-billion investment by TC Energy.
The 1,947-kilometre project will be able to carry 830,000 barrels per day of crude oil from Hardisty, Alta., to Steele City, Neb. where it will connect with TC Energy’s existing facilities.
The company formerly known as TransCanada says with pre-construction activities underway, the pipeline is expected to enter service in 2023.
Once the project is complete and in service, TC Energy expects to acquire the Alberta government’s equity investment under agreed terms and conditions and 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 $30 billion secured capital program, in a manner that is consistent with maintaining our strong financial position and credit metrics,” TC Energy chief executive Russ Girling said in a statement.
The project was first proposed more than a decade ago but has faced numerous hurdles and had been rejected by the Obama administration.
However, U.S. President Donald Trump has worked to revive the project and been a strong backer of the pipeline.
“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,” Girling said.
“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.”
This report by The Canadian Press was first published March 31, 2020.