TC Energy headquarters. A cabinet briefing document outlines a plan to provide natural gas producers with 'several viable alternatives' to the NGTL conduit, which the Calgary company owns and operates.Todd Korol/The Canadian Press
The Alberta government is considering establishing a Crown corporation to boost the development of natural gas pipelines as part of its push to attract more power-hungry data centres to the province.
Premier Danielle Smith has enthusiastically pitched Alberta as a prime destination for artificial-intelligence data centres, pointing to the province’s abundant supplies of natural gas for electricity production and its cooler climate.
But a recent cabinet briefing document, first uncovered by The Narwhal and subsequently obtained by The Globe and Mail, says a lack of competition within the natural gas pipeline sector and insufficient transportation capacity means the province could miss out.
“If investors cannot secure timely access to a reliable natural-gas supply, Alberta risks losing these types of investments to other jurisdictions,” says the document, which was prepared by the Energy and Minerals ministry.
The document, titled “Building a modern natural-gas access framework for Alberta’s future,” proposes creating two new Crown corporations.
The first would carry out “system-wide planning for gas infrastructure to address demand needs across the province.” The other would “construct, own or backstop gas infrastructure,” and would “ensure identified infrastructure needs are met where incumbent utilities decline to invest.”
It reasons that the corporations would help boost competition in the natural gas transportation sector by bringing in new market players, facilitating more shipping solutions and providing the province with greater regulatory autonomy over infrastructure development.
The document suggests full implementation would cost between $53.9-million and $162.6-million.
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In an e-mailed statement, the office of Alberta Energy Minister Brian Jean said internal materials don’t represent government decisions.
Mr. Jean’s office continued that an “increasing number of project proponents across a variety of industries have raised concerns about accessing industrial quantities of natural gas in several regions of Alberta.” It added that the government is trying to “identify practical solutions that support future growth and investment.”
At the heart of the plan in the document is providing natural gas producers with “several viable alternatives” to the NOVA Gas Transmission Ltd. (NGTL), which is owned and operated by Calgary-based TC Energy. It is the province’s largest natural gas transportation system, connecting most of the production in Western Canada to domestic and export markets.
But the conduit will run at or near capacity through 2029. TC Energy has “limited plans” for new capital investment past 2030, the document says, because its return on equity from the line is lower than from its investments in the United States.
Its returns south of the border average around 14 per cent, whereas NGTL is closer to 10 per cent, the document says. Indeed, TC Energy chief executive François Poirier has said that his company intends to stick to lower-risk expansions in the U.S., rather than in Canada.
A full-capacity NGTL is a problem for Alberta’s data-centre strategy, the document says, because the province cannot guarantee timely expansion of gas transmission capacity to support new demand.
Even so, it acknowledges that attempting to build gas transmission infrastructure in advance of projected demand growth would increase the financial risks to a future Crown corporation.
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The document criticizes TC Energy several times.
Not only has TC Energy’s market dominance via the NGTL led to “downstream service reliability risks,” it says, the company’s “underinvestment in NGTL pipeline capacity has caused a market failure in the natural-gas sector leaving key growth regions unable to access gas.”
In all, it concludes, the company’s future plans for NGTL are “misaligned with the Government of Alberta’s projected demand for natural gas in the province.”
The document says that government has been engaging with TC since 2024 to address its worries about pipeline constraints, including operational and policy discussions at the department level and strategic meetings between Ms. Smith and TC’s executive leadership.
But “TC Energy’s proposed solutions fell short,” the document says.
“Given the extensive discussions with TC Energy since 2024 that have produced no viable solutions to date, and the time-sensitive opportunities available to Alberta, escalatory and direct measures are now required.”
TC Energy did not respond to a request for comment.
The government’s push toward AI computing infrastructure has been controversial. Alberta Technology Minister Nate Glubish faced lineups of furious residents in August at town halls discussing the government’s plans for attracting data centres, reflecting a growing backlash to AI across North America that has transcended political leanings.
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Ms. Smith has pressed ahead, joining Meta in July when the company announced it was planning to spend more than $13-billion to build a massive data centre north of Edmonton. Anthropic, the San Francisco-based AI giant behind the Claude chatbot, recently posted a job hiring for a data-centre community-engagement manager based in Alberta to make the company “a trusted, visible and valued neighbour.”
But advancing Alberta’s Al data-centre strategy “depends on reliable access to natural-gas service,” says the document prepared for cabinet - hence the need for change.
Alongside Crown corporations, it is considering new legislative instruments that would enable government to introduce competition into natural gas infrastructure “where, in the opinion of the Minister, the marketplace is restricting competition to the detriment of the public interest including the broader social, economic and environmental goals of the government.”
However, it notes, doing so “may create near-term investor uncertainty at the same time the Government of Alberta is actively courting hyper-scale data centre capital and other investors.”
The briefing document also says that the changes being proposed could lead to litigation from industry – including TC Energy – suggesting legal defence could cost between $2-million to $8-million. It also raises the point of potential legal action from Indigenous communities over the lack of consultation on proposed projects.