Five of Canada's largest oil sands producers are aiming for a late-2027 to early-2028 final investment decision on the Pathways carbon capture and storage hub, designed to sequester 6 million tonnes of CO₂ per year, the president of the Oil Sands Alliance told Reuters this week.

Kendall Dilling, who heads the industry group representing Canadian Natural Resources, Imperial Oil, Suncor Energy, Cenovus Energy and ConocoPhillips Canada, said the FID window assumes that producers and the governments of Alberta and Canada finalise the fiscal framework by mid-November.

"It depends, obviously, on regulatory approvals and a few things, but I think late 2027 into early 2028 is kind of that window," Dilling said.

How did the design shrink from 22 Mt to 6 Mt?

The Pathways scheme, first proposed in 2021 as a CO₂ trunkline tied to a sequestration hub in Alberta, originally targeted 22 Mt/year of emissions reductions by 2030. After years of cost overruns and political friction, producers and Ottawa signed a framework agreement in July covering a scaled-down scope — 6 Mt/year by the mid-2030s and an additional 10 Mt/year by 2045.

Dilling defended the revision against environmental criticism, which has been sharpened by the alliance's previous public messaging.

"The [prior proposal] was an incredibly aggressive scale and timeline that would have been, I think, very difficult to manage and to contain costs," he said.

What sits at the centre of the federal-Alberta pact?

The Pathways hub sits inside a non-binding agreement signed earlier this year between Alberta and Ottawa that ties the future of new oil production growth directly to emissions performance. Prime Minister Mark Carney has endorsed Alberta's vision of a 1 MMbpd Pacific Coast export pipeline, but has conditioned federal backing on Pathways advancing.

The federal push comes as Ottawa tries to insulate the Canadian economy from U.S. President Donald Trump's tariff regime by diversifying crude export routes.

That linkage has rankled some operators inside the alliance. Cenovus CEO Jon McKenzie said in June that Pathways could cost up to C$30 billion and, paired with the federal carbon tax, would erode competitiveness against U.S. Permian and Middle East barrels.

Dilling did not dispute the cost concern but pushed back on the idea that industry has cooled on the project itself.

"Today, global focus on the climate issue has tempered, for sure, but I think as the industry, we take a long-term view here," he said. "So that if 10 years from now, the emissions-per-barrel discussion is really globally important again, we're not on our heels. We've been out on our front foot."

Where does the regulatory package stand now?

The July framework deal lays out conditions for advancement — carbon pricing, financial support and permitting — but most of the proposed policy levers have not yet been drafted into final legislation. That legislative queue is now the critical path item between today's October timeline and any 2027 sanctioning.

Producers have also started early engineering work on the CO₂ trunkline routing and on candidate storage formations across northern Alberta, though the alliance has not released a detailed project budget.

Three near-term watch items sit in front of operators:

• A signed Alberta-Ottawa definitive fiscal agreement, targeted by mid-November
• Draft federal and provincial legislation translating the July framework deal into binding rules
• Permitting milestones through 2026 and 2027 on the CO₂ pipeline route

A sanctioning announcement in the late-2027 to early-2028 window would unblock the new Pacific pipeline that Carney has publicly tied to the hub.