Alberta Budget Holds Out Hope for Keystone XL With No Provisions

Alberta’s budget came with no provisions for investments that the Canadian province made in the Keystone XL pipeline, even after the project’s permit was canceled by U.S. President Joe Biden on his first day in office.

“Currently, the Government of Alberta is working with TC Energy to explore all options to advance the project and is strongly encouraging the Government of Canada to do the same,” the province said in its spending plan for the fiscal year that starts in April, citing the company that owns the project.

Home to the Canadian oil sands, the western province has long struggled with a lack of enough pipeline capacity to ship its crude to U.S. refineries. Alberta Premier Jason Kenney has threatened to take legal action against Biden’s decision.

Below are some of the main numbers from the budget report:

  • Exposure to Keystone XL was C$1.276 billion ($1 billion) as of this month in the form of an C$384 million equity payment and C$892 million in loans guaranteed by the Alberta government
  • Deficit is projected to fall to C$18.2 billion, from C$20.2 billion in the previous fiscal year
    • Total revenue to rise by C$1.4 billion to C$43.7 billion
  • Real GDP to grow by 4.8% in 2021, compared with a 7.8% contraction in 2020

Oil-market forecasts:

  • WTI oil price is forecast to average $46 a barrel in the coming budget period, up from $39.30 in the previous
  • Bitumen output from the oil sands will rise to 3.2 million barrels a day from 3 million
  • Conventional oil production to rise to 410,000 barrels a day, from 398,000
  • Local WCS oil price to average C$40.70 a barrel

©2021 Bloomberg L.P.

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