The Keystone XL Pipeline will receive more than $1bn of funding from the Canadian state of Alberta to accelerate construction.

The Government of Alberta will invest CAD1.5bn ($1.05bn) from today and has guaranteed a CAD6bn ($4.2bn) loan from 2021. The announcement follows six months of funding talks to ensure rapid construction of the 1,947 km Keystone XL pipeline.

Alberta premier Jason Kenney said: “We cannot wait for the end of the pandemic and the global recession to act. There are steps we must make now to build our future focussed on jobs, the economy, and pipelines.

“After construction is complete, we will be able to sell our shares at profit. In addition, the project will have a net return of over CAD30bn to the Alberta taxpayer through royalties and higher prices for Alberta oil in the next 20 years.”

Construction will begin at the US-Canada border immediately.

The announcement says production in Alberta “is limited by the lack of pipelines”.

It continues: “Without the ability to export more oil, there is no incentive for producers to invest in more production in Alberta. […] Without more pipelines, the future of our oil and gas industry is capped; with today’s announcement, employers and investors should have the confidence to maintain existing projects and to spend new money on new projects.”

These comments were mirrored by i3 Energy when it announced the purchase of fields in Alberta earlier this week.

The pipeline will finish construction and enter service in 2023, when it will carry 830,000 barrels of oil per day.