Alberta's Budget Includes Proposed Oil Pipeline Spend

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Alberta's new budget was criticized for tacking on billions of dollars to its deficit. While not as much as other infrastructure targets, millions would go to support the development of a new crude oil pipeline.

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Two-year Cash Support for Oil Pipeline

Though criticized for adding to the provincial deficit, Alberta's government laid out planned capital support for a proposed crude oil pipeline to the west coast, part of a broad-based trade diversification effort.

The provincial government of Alberta outlined a spending wish list as part of its annual budget proposal on Thursday. The government earmarked US$5.2 billion for local infrastructure needs, including roads, and said it was committing US$11 million over the next two years to support the planning for a proposed crude oil pipeline to British Columbia.

"Our economy is fueled by our responsibly produced oil and gas, and the global demand has never been higher or more important," said Brian Jean, the provincial minister of energy and minerals.

Proposed last year amid simmering trade tensions with the U.S., its largest trading partner, Albertans and the federal government in Ottawa, Ontario, mulled prospects to send more crude oil to Asian economies from export terminals in British Columbia.

Alberta's government already committed $10 million last year to support early engineering work, cost estimates and community engagement for the proposed pipeline. Once those steps are completed, the provincial government said it expected the private sector to take up the project from there.

The so-called Northwest Coast Oil Pipeline already includes Calgary-based energy companies Enbridge, Trans Mountain and South Bow on its advisory committee.

The Trans Mountain network is currently the only midstream network capable of delivering Canadian crude oil outside of North America. An expansion project completed in May 2024 nearly tripled the capacity on the pipeline system to a total of 890,000 barrels per day (BBL/d).

At a time when a lower-for-longer outlook for crude oil and U.S. trade disputes are hampering the Canadian economy, the provincial budget plans were highly criticized because of the US$6.5 billion that would be added to the deficit.

"We have a huge deficit, so that means the debt is going up, spending is going up and taxes are going up," Kris Simms, the Alberta director for the Canadian Taxpayers Federation, told The Canadian Press.

Canada as a whole is working on nation-building projects that would help cut the amount of U.S. trade in half, with projects ranging from small modular nuclear reactors to pipelines and liquefied natural gas (LNG).

LNG Part of Trade Goals

Canada is among the largest natural gas producers in the world, and a net exporter of natural gas to the U.S. economy. Exports began last year of LNG from British Columbia and the province is primed for more.

On Thursday, Pembina Pipeline said it had long-term supply agreements that underpinned its Cedar LNG facility planned for British Columbia.

"These agreements further validate the Cedar LNG project and highlight the strong demand for global export capacity given the clear advantages of Canadian West Coast LNG, including competitively priced feedstock and advantaged shipping distances to Asian markets," the company said.

Belgian shipping company EXMAR was selected recently by the developers of the Cedar LNG facility to advance work on the necessary floating liquefaction unit, dubbed Megugu, an aboriginal word for "spirit of the tree."

Joint venture partners Pembina Pipeline and the indigenous Haisla Nation announced the final investment decision (FID) on the Cedar LNG project in 2024. The facility will consist of a floating LNG facility in Kitimat, British Columbia, with a nameplate capacity of about 3.3 million metric tons per annum (MTPA). Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can learn more by viewing the project report and plant profile.

If progress continues as planned, Cedar LNG could be in service by late 2028.

By the Numbers

• $11 million for proposed oil pipeline
• 3.3 MTPA from Cedar LNG
• $6.5 billion tacked onto deficit

Key Takeaways

• Alberta adding to deficit with new budget.
• Plans include infrastructure and pipelines.
• Canada is on a trade diversification spree.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).