By Ethan Lou

CALGARY, Alberta, Dec 23 (Reuters) - Canada's oil sands prospects were buoyed by recent pipeline approvals, but news of two companies ditching local projects on the same day served as a reminder that industry confidence is still weak.

Investment decisions have been relatively modest in the high-cost environment as the oil patch faces uncertain export routes and a tough emissions cap.

Ottawa last month approved the Kinder Morgan Inc (KMI.N) Trans Mountain and Enbridge Inc (ENB.TO) Line 3 pipeline projects, a welcome boost to the industry, which has long pushed to resolve export congestion that kept Canadian crude priced at a discount.

Still, Norwegian oil major Statoil ASA (STL.OL) , which in 2014 cited market access for deferring its Corner oil sands project, said on Dec. 14 it would sell all its assets at a loss and withdraw from Canada's oil sands.

The same day, Koch Industries Inc (KCHIN.UL) announced it wants out of a yet-undeveloped local project. The Alberta Energy

Regulator (AER) approved that request this week.     

Statoil spokesman Erik Haaland said the sale was made so the company can concentrate on "new competitive assets" elsewhere. Koch did not respond to requests for comment.

In a letter to the AER seen by Reuters, a local executive cited the province's environmental regulations.

Alberta, home to the third-largest crude reserves in the world, has one of the biggest extraction costs and higher emissions levels, on which the left-leaning provincial government has placed a hard cap.

Don MacIntyre, the electricity and renewables critic for Alberta's Wildrose opposition party, said the 100-megaton cap leaves only about 30 megatons for future development.

The cap will cause more operators with undeveloped lands - such as Koch - to abandon their Canadian projects, he said.

"The cap on emissions is actually a cap on development," MacIntyre said.

To be sure, stability in oil prices over the past year and a commitment by major producers to trim output has raised hopes for better times ahead.

But companies are moving forward gingerly, with those that are announcing restarts of projects and rising capital budgets ready to pull back if needed.

Canadian Natural Resources Ltd (CNQ.TO) said it may roll back its budget by nearly C$1 billion if prices fall. Athabasca Oil Co (ATH.TO) has been noncommittal about restarting the Statoil Corner project it acquired, saying it is "prospective" only when "oil prices can clearly support it."

Alberta Energy Minister Marg McCuaig-Boyd in a statement attributed the industry's hesitancy to "the low and volatile price of oil," and not regulations.

The approved pipelines, while offering future greater export capacity, are also no silver bullet for the industry.

"The Trans Mountain expansion and Line 3 - there's still uncertainty around the timing on those," said Wood Mackenzie analyst Stephen Kallir, noting the first lawsuit against Trans Mountain since its approval was filed on Tuesday.

"Deals like these don't happen overnight." ($1 = 1.3370 Canadian dollars)