The next 12 to18 months could be pivotal for Alberta’s energy sector as the long-awaited Trans Mountain expansion (TMX) and Coastal Gas Link (CGL) pipelines come on stream, says Alberta Premier Danielle Smith.In an exclusive interview with The Western Standard, Smith said both would open up new markets for Alberta‘s main energy products, diversify markets and pad treasury coffers.In the case of oil, Smith said initial analysis by government beancounters shows that TransCanada Mountain will help shrink differentials between Alberta’s signature Western Canadian Select (WCS) and North American benchmark West Texas Intermediate (WTI) by almost half, adding up to USD$7 to $10 per barrel — which will have an equally beneficial impact on producers‘ expansion plans as well as government coffers..“If we can earn an extra $7 on every barrel of oil we sell it will make a big difference,”Alberta Premier Danielle Smith.“The thing that happens when you do have the opportunity to potentially send your product internationally, and once you're on water, we're anticipating it will cause a tightening of the differential that we've had between Western Canada Select by West Texas (Intermediate) that it probably would have been up I think as high as around 19 bucks. I think they're anticipating it'll come down to more like $11 or $12. If we can earn an extra $7 on every barrel of oil we sell it will make a big difference,” she said.“And then on top of that, to have the additional 600,000 barrels per day able to go to the market, I think that's getting a number of our producers looking at ways that they might continue the expansion.” In the case of CGL, looming tidewater exports may not have as much of an immediate impact on price when it begin operations later this year or early 2025, but she said providing an outlet for Alberta’s landlocked natural gas could help spur expansion of Canada’s nascent LNG export industry..“When it comes to Coastal Gas, that's going to be really key in helping to accelerate some of the other LNG projects that are being contemplated,” she said. “So I'm feeling like there's a real opportunity for us to be able to benefit and again it’s the same issue. Once you get your product on the ocean, it can go anywhere. Now you can start getting some international pricing. So I'll be very interested to see what kind of impact that has.”Alberta natural gas prices were about CAD$1.60 on Friday compared to more than $10 for landed LNG in Japan. That in turn could open up new markets for other value added products like ammonia — which is a storage medium for hydrogen — and also facilitate further exports under Article 6 of the Paris Accord to potentially earn emissions credits.“I think that should also put some upward pressure on prices. We'll watch and see, it's been very low because we have such a huge basin for natural gas. But there's such a huge demand in the world — South Korea, Japan, a lot of our other Asian partners, India — everybody is looking to see whether they're going to have that long term supply. And I think we have an opportunity now to be able to supply it.”
The next 12 to18 months could be pivotal for Alberta’s energy sector as the long-awaited Trans Mountain expansion (TMX) and Coastal Gas Link (CGL) pipelines come on stream, says Alberta Premier Danielle Smith.In an exclusive interview with The Western Standard, Smith said both would open up new markets for Alberta‘s main energy products, diversify markets and pad treasury coffers.In the case of oil, Smith said initial analysis by government beancounters shows that TransCanada Mountain will help shrink differentials between Alberta’s signature Western Canadian Select (WCS) and North American benchmark West Texas Intermediate (WTI) by almost half, adding up to USD$7 to $10 per barrel — which will have an equally beneficial impact on producers‘ expansion plans as well as government coffers..“If we can earn an extra $7 on every barrel of oil we sell it will make a big difference,”Alberta Premier Danielle Smith.“The thing that happens when you do have the opportunity to potentially send your product internationally, and once you're on water, we're anticipating it will cause a tightening of the differential that we've had between Western Canada Select by West Texas (Intermediate) that it probably would have been up I think as high as around 19 bucks. I think they're anticipating it'll come down to more like $11 or $12. If we can earn an extra $7 on every barrel of oil we sell it will make a big difference,” she said.“And then on top of that, to have the additional 600,000 barrels per day able to go to the market, I think that's getting a number of our producers looking at ways that they might continue the expansion.” In the case of CGL, looming tidewater exports may not have as much of an immediate impact on price when it begin operations later this year or early 2025, but she said providing an outlet for Alberta’s landlocked natural gas could help spur expansion of Canada’s nascent LNG export industry..“When it comes to Coastal Gas, that's going to be really key in helping to accelerate some of the other LNG projects that are being contemplated,” she said. “So I'm feeling like there's a real opportunity for us to be able to benefit and again it’s the same issue. Once you get your product on the ocean, it can go anywhere. Now you can start getting some international pricing. So I'll be very interested to see what kind of impact that has.”Alberta natural gas prices were about CAD$1.60 on Friday compared to more than $10 for landed LNG in Japan. That in turn could open up new markets for other value added products like ammonia — which is a storage medium for hydrogen — and also facilitate further exports under Article 6 of the Paris Accord to potentially earn emissions credits.“I think that should also put some upward pressure on prices. We'll watch and see, it's been very low because we have such a huge basin for natural gas. But there's such a huge demand in the world — South Korea, Japan, a lot of our other Asian partners, India — everybody is looking to see whether they're going to have that long term supply. And I think we have an opportunity now to be able to supply it.”
