Alberta an ideal source for crude oil, liquefied natural gas, says energy center official

Despite a gloomy global market, there has not been a better time for China and Canada to establish oil and gas trade links, a senior energy expert has said.

The state of Alberta and other parts of Canada are ideal sources for crude oil and liquefied natural to fuel China's long-term strategy, said Han Hua, managing director of the Sino-Alberta Petroleum Center.

The center, one of China's earliest energy joint ventures with another country, was set up in Beijing in 1989 by China National Petroleum Corp, the country's largest oil and gas producer and supplier, and the Alberta government.

Before heading the center, Han worked for the CNPC and was involved in oil collaboration deals in the Middle East, Central Asia and Canada. Yet the veteran negotiator said China and Canada have had no energy trade since China National Offshore Oil Corp agreed in 2012 to purchase Alberta oil producer Nexen Inc for 15.1 billion US dollars, the largest overseas acquisition by a Chinese State-owned enterprise.

"Cost is the key issue," Han said. "The west coast of Canada doesn't have ports that can handle 300,000-ton oil tankers from inland, and the construction of oil pipelines from Alberta to the west coast has been halted due to protests from residents."

In addition to State-owned enterprises, private investors from China have been put off due to the drop in the oil price since last year.

"The absence of a pipeline to the Pacific has made the idea of shipping Canada's oil to Asia impractical," said Liu Naishun, a Chinese-Canadian energy investor based in the British Columbia. "Chinese investors value short-term interest and are concerned with time costs. In Canada, the laws and culture can cost too much time."

However, Han urged China to eye long-term energy security and find new energy partners. "Because of shale oil, the United States doesn't need to rely heavily on overseas oil supplies. But it's impossible for China to explore shale oil due to many reasons, including geological and water resources," he said.

Therefore, China will need to continue importing oil and rely on stable supplies from overseas sources. "Uncertainties still exist over the changing regional political situations in China's main oil and gas sources, such as the Middle East and Myanmar, but shipping from Canada is safe," he said.

A delegation of Canada's largest oil and LNG producers will visit China next week to explore business opportunities.

Companies from Alberta, a state known for its rich tar sand, have been providing technical support at China's oilfields for some time, helping to develop drilling and refinery technologies, according to Han.

However, all the Canadian representatives at the Sino-Alberta Petroleum Center were withdrawn several years ago, with the center now largely financed by the CNPC.

wangru@chinadaily.com.cn