Alberta Considers New Crown Corporations to Boost Gas Pipelines for AI Data Centres
The Alberta government is evaluating the creation of two new Crown corporations to expand natural gas pipeline capacity and secure supply for attracting major tech investments, including AI data centres. A cabinet briefing document highlights concerns that the existing dominant operator, TC Energy’s NOVA Gas Transmission Ltd., lacks sufficient investment plans to meet future demand, potentially causing the province to lose out on billions in potential projects.
The Government of Alberta is considering establishing two new Crown corporations aimed at accelerating natural gas pipeline development. The initiative is designed to ensure reliable energy supply capable of supporting power-hungry artificial intelligence (AI) data centres, a sector Premier Danielle Smith has actively courted.
According to a cabinet briefing document titled "Building a modern natural-gas access framework for Alberta’s future," the proposal stems from concerns that the current infrastructure cannot meet projected demand. The document identifies NOVA Gas Transmission Ltd. (NGTL), owned by TC Energy, as Alberta's largest natural gas transportation system. NGTL is expected to run at or near capacity through 2029.
The briefing notes that TC Energy has limited plans for new capital investment in NGTL beyond 2030. This hesitation is attributed to financial returns; the return on equity for NGTL is approximately 10 per cent, significantly lower than the roughly 14 per cent average return on equity TC Energy achieves in the United States. Although the government has engaged with TC Energy regarding these constraints since 2024, the company's proposed solutions were deemed insufficient by provincial officials.
To address these gaps, the first proposed Crown corporation would be responsible for system-wide planning of gas infrastructure to better align with demand needs across the province. The second corporation would focus on construction, ownership, or backstopping of gas infrastructure in cases where incumbent utilities decline to invest.
The strategic push comes amid high-profile interest from global tech firms. In July, Meta announced plans to spend more than $13-billion to build a massive data centre north of Edmonton. Additionally, Anthropic recently posted a job hiring for a data-centre community-engagement manager based in Alberta. Canadian AI firm Cohere is also reported to be in advanced talks to raise $3-billion.
The document warns that a lack of competition in the natural gas pipeline sector and insufficient transportation capacity could cause Alberta to miss out on these critical data centre investments, losing them to other jurisdictions. The estimated cost for full implementation of the two new Crown corporations ranges between $53.9-million and $162.6-million.
However, the plan faces potential hurdles. Legal defence costs for possible litigation from industry players and Indigenous communities are estimated between $2-million and $8-million. There are also concerns about growing backlash against AI data centres among residents, as well as risks associated with building infrastructure ahead of confirmed demand.