Workers lay pipe during construction of the Trans Mountain pipeline expansion in Abbotsford, B.C., on May 3, 2023.DARRYL DYCK/The Canadian Press
Alberta Investment Management Corp. has its eye on the Trans Mountain pipeline as a potential investment, with the expansion project creeping closer to completion.
Edmonton-based AIMCo is Canada’s sixth-largest pension-fund manager, including plans for public servants, teachers, municipal employees, law-enforcement officers and academics in Alberta. The Crown corporation is coming out of a complete overhaul, after it lost $2.1-billion on a trading strategy gone wrong under previous leadership when COVID-19 struck in the spring of 2020.
AIMCo had been making complex derivative bets against market volatility for years, and profiting from them. But the strategy failed spectacularly when markets plunged early in the pandemic.
The cost of the pipeline expansion, meanwhile, has ballooned dramatically to a projected $30.9-billion, from a 2017 estimate of $7.4-billion.
But AIMCo chief executive Evan Siddall told BNN Bloomberg in an interview aired Thursday that the fund manager has an active file on Trans Mountain, and “would look at it” as an investment. “The government knows that, and we’re keeping track of the situation,” he said.
AIMCo said in an e-mail that the fund makes large-scale investments globally in all asset classes, including infrastructure.
“The Trans Mountain pipeline is an example of the type of Canadian infrastructure asset that AIMCo, along with other investment managers, would consider if it were made available,” it said.
The existing Trans Mountain pipeline carries 300,000 barrels of oil per day, and is Canada’s only pipeline system transporting oil from Alberta to the West Coast. It was bought by the federal government for $4.5-billion in 2018. The expansion will raise daily output to 890,000 barrels.
Trans Mountain Corp. took over the pipeline when Ottawa bought it from Kinder Morgan in 2018, after the company threatened to scrap the expansion project in the face of environmentalist opposition.
In 2020, the expected price of the expansion jumped to $12.6-billion. In 2022, the federal government said that no more public funds would be spent on the project after the cost ballooned once again, to $21.4-billion, and completion was delayed until late 2023.
Trans Mountain expects the long-delayed project will be in service near the end of the first quarter of 2024, though the date is subject to change, the corporation said in an e-mail this week.
Mr. Siddall took over leadership of AIMCo in July, 2021. In slightly more than two years at the helm, he has changed most of its executive team, launched a revamp of its technology systems, opened new offices abroad and shifted the way it manages risk in its investments.
The current Alberta government is a vocal cheerleader for the oil and gas sector, which drives revenues to the provincial coffers. And under former premier Jason Kenney, the United Conservative Party government made a $1.3-billion bet on the Keystone XL pipeline in 2020 with Calgary-based pipeline builder TC Energy Corp. TRP-T, when Donald Trump was still in the White House.
The US$11.5-billion pipeline was designed to ship up to 830,000 barrels of crude a day from Hardisty, Alta., to Steele City, Neb. The pipeline was among a series of projects seen as crucial to Canada’s energy industry that became symbols for the North American climate movement.
That bet failed when U.S. President Joe Biden decided to kill the project in 2021, and TC Energy terminated its plans to build the project.
Emma Graney
James Bradshaw