Canada Fast-Tracks 1 Million-Bpd Pacific Link Oil Pipeline to Asia

Canada is moving forward with a plan to construct a 1 million-barrel-per-day oil pipeline to the Pacific coast, providing Alberta with an alternative route to sell oil to Asian markets and reducing its reliance on the United States. Prime Minister Mark Carney announced on Thursday that the project will be designated as a national interest, allowing it to undergo a single federal review process, slated to conclude by September 1, 2027.

The pipeline would stretch from Alberta to southern British Columbia, following the existing Trans Mountain corridor. The primary developers of the project would be Trans Mountain Corp. and Pembina Pipeline, with the federal and Alberta governments holding the majority stake. Indigenous communities would be entitled to a minimum of 10% ownership.

The construction cost for the pipeline is projected to range between C$35.2 billion and C$43.7 billion. Ottawa anticipates the pipeline could contribute over C$20 billion to the annual GDP, generate up to 140,000 jobs at peak construction, and generate C$100 billion in government revenue by 2060. Currently, Canada exports over 90% of its crude oil to the United States, relying on the 890,000-bpd Trans Mountain pipeline, which operates at full capacity.

The Pacific access to this pipeline has become increasingly significant following the Iran war, which disrupted Middle Eastern oil exports and led Asian refiners to seek alternative sources. China is already the largest purchaser of Trans Mountain's seaborne exports, acquiring approximately 60% of shipments. Along with pursuing an additional 300,000 to 400,000 bpd of capacity on the existing Trans Mountain system, Canada is advancing with this new pipeline.

However, the project still requires finalizing the route, obtaining regulatory approvals, and consulting with Indigenous communities and the province of British Columbia.