The former President of the Grande Prairie Petroleum Association believes the potential for renewed investor confidence stemming from the completion of the Keystone XL Pipeline could create a trickle-down of positive effects for those directly and indirectly in the oil and gas sector.
Rob Petrone says the endgame of KXL, moving Alberta oil to the southern U.S., is something the industry has been working on with the government for the last few years, and he believes it could make a big difference long term.
“Keystone is just increasing the volumes we can ship to the lower 48, but any time we get an opportunity to export more and generate revenue from that. Every little bit helps, especially in this day and age with confidence levels being so low, and we’ve had a lot of disappointments the last several years, so it’s great to have some good news.”
On March 31st, the province announced it had finalized an agreement with Calgary-based TC Energy Corporation to provide $1.5 billion in equity investment for the project this year, with an additional $6 billion in loan guarantees next year. The aim is to have the Alberta to Gulf of Mexico pipeline completed and in service by 2023.
Petrone adds the crash in oil prices only made the impact of the COVID-19 pandemic on the industry worse, but believes that if all goes well when it comes to construction on Keystone XL, a sharp and needed corner could be turned.
“With the tragedy we’ve got going on here right now and the expenses to try and manage the pandemic, it’s great to be able to look out a couple of years and see some opportunities to generate revenue to help pay some of the debt off we are accumulating.”
The province says the government-backed project will create more than 1,400 direct and 5,400 indirect jobs across the province during the construction phase. It’s expected to generate an estimated $30 billion in tax and royalty revenues over an undisclosed amount of time.