Alberta backing offsets higher risk after Biden vows to kill Keystone XL: analyst

Alberta backing offsets higher risk after Biden vows to kill Keystone XL: analyst

CALGARY — A financial analyst says Alberta government backing means TC Energy Corp. can be more comfortable continuing construction of the Keystone XL pipeline this summer despite Joe Biden’s vow to kill it if he is elected president in November.

Jennifer Rowland of Edward Jones says it’s not surprising that the campaign for the leading U.S. Democratic Party candidate said Monday that he would cancel the presidential permit for the project issued by President Donald Trump.

She says the declaration, however, represents a significant risk for the US$8-billion project and would likely result in the Calgary-based company re-examining how prudent it is to continue construction.

The project was given a favourable investment decision on March 31 following Alberta’s pledge to take a C$1.5-billion equity stake and provide a loan guarantee to ensure work started immediately.

Three weeks ago, TC Energy said it would adjust its plans but forge ahead with construction despite the impact of a U.S. court ruling that invalidated a nationwide permit allowing pipelines to cross waterways.

Spokeswoman Sonja Franklin of oilsands producer Cenovus Energy Inc. says the company won’t speculate on the outcome of the U.S. election and remains a firm supporter of the pipeline.

Rowland says it would be “naive” to think that Biden wouldn’t kill the pipeline because it has been partly built.

“I think it becomes potentially a little bit easier for TC to go ahead and spend knowing that the initial money is really being backed by the government,” she said in an interview.

“That does take some pressure off so that they can continue. They can gamble because it’s not their money.”

This report by The Canadian Press was first published May 19, 2020.

Companies in this story: (TSX:TRP, TSX:CVE)

The Canadian Press

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