‘Tight timeline’ to nail down trade-offs in Pathways deals, Cenovus executive says

CALGARY – An executive at Cenovus Energy Inc. says top oilsands producers, Ottawa and the Alberta government face a time squeeze to finalize agreements on moving the Pathways carbon storage project forward by their mid-month target.  

“We have some incredibly nuanced, bespoke agreements to hammer out, and they’re tough because they’re new. No one’s drafted them before,” Jeff Lawson, corporate development and chief sustainability officer, told a conference call with analysts Wednesday. 

“What you should take away is that both levels of government — the feds and the province — have been excellent to deal with. They’ve been pragmatic. They’re trying to push this ahead.”

Members of the Oil Sands Alliance, which includes Cenovus and four of its peers, reached a non-binding memorandum of understanding with Ottawa and the province in July. They set a Nov. 15 target to pin down binding agreements with each of the companies.

Lawson listed off several positive developments for the sector in recent months: a major expansion in investment tax perks; reforms to simplify regulatory reviews; the national-interest designation for a new West Coast pipeline and expected royalty incentives from the Alberta government. 

“Now we need to hammer out actually the trade-off for that, which is what our six-megatonne carbon capture project looks like. All the companies are aligned in hammering that out if we have all the supports in place. So it’s all coming together,” he said. 

“Nov. 15 is a pretty tight timeline to get all this stuff done, but we’re working towards that. And I guess we’ll play it week by week if we actually hit that timeline. But we are on a path, we’re not falling off the path and we’re pushing forward on it.”

The Pathways-pipeline quid pro quo was part of a sweeping accord Ottawa and Alberta signed in November 2025 on a wide array of energy matters. The idea is for Pathways to offset some of the carbon dioxide emissions the proposed West Coast pipeline, Pacific Link, would enable through increased oilsands production.

Pathways involves a pipeline network that would carry carbon dioxide captured from various oilsands sites in northern Alberta to an underground storage hub near Cold Lake, Alta. The alliance said that Pathways will have the capacity to transport and store about six million tonnes per year of captured CO2 by the mid-2030s. The parties are aiming for another 10 million tonnes of reductions by 2045.

That’s a significant scale-back from the 22 million tonnes of emissions by 2030 they had earlier targeted.

In the July Pathways-centred MOU, governments agreed to pursue regulatory and fiscal policies that would spur oilsands growth, which in turn would ensure the pipeline from Alberta to a tanker port in southern British Columbia can be filled. Ottawa agreed to extending investment tax credits for certain carbon-capture equipment, while Alberta has agreed to “financial supports” to encourage oilsands growth, alluding recently to potential royalty incentives.

The other Oil Sands Alliance members are Suncor Energy, Canadian Natural Resources, Imperial Oil and ConocoPhillips.

“The parties are all sleeves rolled up, meeting endlessly, working hard together,” Suncor CEO Rich Kruger told analysts on his company’s third-quarter conference call on Wednesday. 

“From a Suncor standpoint, we would far rather have a good deal when we’re ready versus a bad or an incomplete deal at an artificial date or deadline … The days on the calendar are just other days to me. Nov. 15 is coming up. Whether we have something on Nov. 15 or not, I don’t know.”

Imperial Oil CEO John Whelan said on a conference call last week that there’s still a lot of work to do, but “there’s no lack of energy or desire to get to a definitive agreement.” 

Last month, Cenovus signed a deal to buy Athabasca Oil Corp. in a $5.7-billion cash-and-stock deal. Athabasca shareholders are to vote on the deal later this month, with its expected close set for December. 

“The rationale for this transaction for Cenovus is very clear. Athabasca brings a high quality oilsands resource base with decades of development potential adjacent to our existing lands where we have strong understanding of the resource and its potential,” said Cenovus CEO Jon McKenzie. 

“Opportunities to have thermal reserves and development inventory of this scale are increasingly rare. We have a proven track record of applying our operating model to improve performance and create value from these types of assets.”

Earlier Wednesday, Cenovus reported a third-quarter profit of $3.36 billion, up from $1.29 billion in the same quarter last year. The profit amounted to $1.83 per diluted share, up from 72 cents per diluted share in the third quarter of 2025.

Revenue for the quarter was $15.98 billion, up from $13.20 billion a year ago.

Upstream production totalled 1,023,500 barrels of oil equivalent per day for the quarter, up from 832,900 in the same quarter last year.

Downstream crude throughput amounted to 437,200 barrels per day, down from 710,700 a year ago.

This report by The Canadian Press was first published Nov. 4, 2026.

Companies in this story: (TSX:CVE)