Washington — Canadian Prime Minister Justin Trudeau said Wednesday he remains committed to building the 590,000 b/d Trans Mountain pipeline expansion to increase access to markets other than the US after years of price discounts for Alberta's oil.
Trudeau's Liberal Party won the most seats in Monday's parliamentary elections, but it lost its majority status, leaving some to question whether he would be forced to strike a deal with smaller liberal parties that oppose the pipeline in order to form a government.
Trudeau said he had no plans to form a coalition with other parties, whether formal or informal.
"We recognize that there is a frustration with the economic challenges being faced by Albertans," Trudeau said during a press conference. "My focus as a government is going to be responding to those preoccupations. We need to recognize that different parts of the country go through different challenges."
Construction on Trans Mountain is set to start this fall, although legal and political obstacles are still possible.
Under Trudeau, the federal government took the unusual step in May 2018 of buying the existing 300,000 b/d Trans Mountain pipeline and 590,000 b/d expansion project from Kinder Morgan for $3.5 billion.
S&P Global Platts Analytics expects at least two of Canada's three delayed oil export projects to be completed by the end of 2022: Trans Mountain, Enbridge's 370,000 b/d Line 3 replacement to the US Midwest and TC Energy's 830,000 b/d Keystone XL pipeline to Nebraska.
A lack of sufficient pipeline capacity to move Alberta's oil to market pushed Western Canadian Select crude to a record wide discount to WTI late last year, forcing the provincial government to impose output curtailments in January.
S&P Global Platts assessed WCS-Hardisty at a $17.05/b discount to WTI-Cushing Tuesday, unchanged from Monday, remaining the widest since May 30.
Alberta has eased the curtailment month by month, with October cuts at 100,000 b/d, narrowing to 80,000 b/d by December. Platts Analytics expects Alberta production to trend upward through April, before falling for spring maintenance.
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