TC Energy Corp. said on Tuesday it would proceed with the construction of the long-delayed $8 billion US Keystone XL pipeline project after getting a $1.1 billion US equity investment from the Alberta government.
The investment from the province would substantially cover planned construction costs through the end of 2020, TC Energy said.
The remaining $6.9 billion US is expected to be largely made in 2021 and 2022 and funded through a credit facility and an investment by TC Energy, the company said.
In a statement, Alberta Premier Jason Kenney said the project was essential for the province’s future prosperity.
“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,” Kenney said. “The Government of Alberta is confident that this is a wise investment.”
TC Energy expects to buy the Alberta government’s stake once the pipeline is in service. It also plans to raise about $1 billion US by selling some of its shares.
Kenney said the provincial government will be able to sell its shares for a profit once the project is finished.
The company, which had planned to start mobilizing heavy construction equipment in February, said last month that there was too much uncertainty to commit immediately to the project.
The pipeline, which would carry 830,000 barrels per day of crude from Alberta to the U.S. Midwest, has been delayed for more than a decade by opposition from landowners, environmental groups and Indigenous groups. The project was also rejected by former U.S. President Barack Obama.