TC Energy plows forward with Keystone XL Pipeline plans
Construction will proceed as planned on the 1,210-mile Keystone XL Pipeline, according to TC Energy Corporation — a prospect the company says could bring around $8 billion into the North American economy.
Years of protests and political flip flops caused ongoing delays, the largest of which came in 2015 when former President Barack Obama blocked construction of the pipeline due to environmental concerns. Now, TC Energy eagerly looks to the day it can deliver more than 830,000 barrels of Alberta crude oil per day to the United States. The company specifically called out thanks to Alberta Premier Jason Kenney and U.S. President Donald Trump, among other politicians and supporters.
“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,” TC Energy President and CEO Russ Girling said. “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.”
Projected to begin service in 2023, oil will run down from Hardisty, Alberta to Steele City, Neb., after which it will connect with other TC Energy facilities in the southward shuffle to U.S. Gulf Coast refiners. Pre-construction activities are already underway.
The funding that will make all this possible stems from a few sources: $1.1 billion as invested equity provided by the Government of Alberta and another $6.9 billion from a mix of project level credit facility guaranteed by that same government and investments by TC Energy itself. Once finished, TC Energy intends to acquire Alberta’s equity investment and refinance its $4.2 billion credit facility.
“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,” said Girling. “Once completed, approximately 98 percent of the Company’s consolidated EBITDA is expected to come from regulated or long-term contracted assets.”
By the end, TC Energy says this should bring in tens of millions in property and income taxes and provide a safer means of transporting crude oil to market. The announcement comes at a time when oil prices have reached some of their lowest levels in decades.
