Ottawa, Alberta, and Pembina Back Trans Mountain's 1 Million Bpd Pacific Pipeline in Nation-Building Heads of Agreement

Trans Mountain Corporation and Pembina Pipeline Corporation signed a non-binding Heads of Agreement on July 2, 2026 to develop a new crude oil pipeline to Canada's Pacific coast. The proposed corridor would carry approximately one million barrels per day. Federal and Alberta governments are co-owners of the development entity alongside Pembina.

Ownership: Federal, Provincial, and Private Equity

Trans Mountain Corporation serves as lead proponent for the project. The corporation is majority owned by the Government of Canada and the Province of Alberta. Pembina Pipeline holds a 10 percent economic interest during construction, with the option to acquire an additional 10 percent once the project reaches commercial operations. Indigenous communities along the route would have the opportunity to take a working interest at commercial operations, a term built into the Heads of Agreement.

Scott Burrows, Pembina's President and Chief Executive Officer, called it "a once-in-a-generation opportunity to advance nation-building energy infrastructure that strengthens Canada's economy," per Pembina's July 2 press release. Pembina has committed no at-risk capital prior to a final investment decision. The partners are targeting definitive agreements by September 2026.

Route and Terminal

The new pipeline would follow the existing Trans Mountain right-of-way through British Columbia, known as the southern route. An export terminal on Canada's West Coast would anchor the project. The southern route avoids the federal tanker moratorium on British Columbia's North Coast, which Prime Minister Mark Carney confirmed would remain in force on July 2, 2026.

Alberta Premier Danielle Smith and Prime Minister Carney both endorsed the project on July 3, 2026. Their support marks a shift from previous federal positions against West Coast crude pipeline expansion. The pipeline would deliver crude to the Vancouver area for tanker loading, the same general corridor served by the existing Trans Mountain Expansion system.

The Capacity Math for Alberta Producers

The existing Trans Mountain Expansion system carries approximately 890,000 barrels per day from Edmonton to Burnaby, British Columbia. Trans Mountain has separately announced plans to increase that capacity to 1.2 million barrels per day by 2029. The new proposed pipeline would add a further one million barrels per day on top of the expanded system.

If both operate at full capacity simultaneously, westward crude export capacity from Alberta would reach approximately 2.2 million barrels per day. Canada's oil production is projected to run at roughly 5.3 million barrels per day in 2026. The combined West Coast corridor would handle about 41 percent of national output, compared with the current system's share of approximately 17 percent.

Western Canadian Select crude was last reported at $56.34 per barrel Thursday, per OilPrice.com data reflecting the previous session close. WTI crude was trading at $68.74 per barrel on the CME as of Thursday morning. The WCS-WTI differential stood at approximately $12.40 per barrel. Increased Pacific export access has historically compressed that spread by reducing dependence on a single U.S. Midwest buyer market.

Pembina's Role and Concurrent Growth

Pembina brings more than 70 years of pipeline development expertise to the corridor project, per the company's July 2 press release. It would provide "independent perspective on cost, schedule, and execution" throughout development. Trans Mountain Corporation retains responsibility for construction, regulatory approvals, stakeholder engagement, and operations.

The corridor agreement arrived alongside Pembina's decision to sanction its Heartland Extraction Plant in May 2026, a separate NGL processing expansion in Alberta. Pembina said capital allocation decisions for the Pacific corridor will track defined project milestones. The company's discretion over any final investment decision limits its near-term financial exposure to the project.

Context: Falling Prices and the Netback Argument

Brent crude was trading at $72.09 per barrel on July 3, down from approximately $94 earlier in 2026, per TradingEconomics. The end-of-first-half settlement at $73.44, covered in the prior Oil Authority article Brent Crude Settles at $73.44 on Last Day of H1 2026, came under pressure from returning Middle East supply. In a lower-price environment, narrowing the WCS discount per barrel becomes proportionally more important to Alberta producers' operating cash flow.

Pacific access allows Alberta producers to price crude against Asian benchmarks rather than depending wholly on U.S. Gulf Coast refinery demand. The Trans Mountain Expansion pipeline, since its 2024 completion, gives Alberta crude access to Westridge Marine Terminal in Burnaby for tanker loading to Asian buyers. The new corridor, if built, would increase Pacific export capacity from roughly 17 to 41 percent of national output.