RE: How about chineThis showed up on my PBN quote page back in December ...
24 Jan2011 - Dow Jones Newswires
(Updateswith comment from Canadian National Railway and PetroBakken Energy in the fifthparagraph.)
By MariIwata
Of DOWJONES NEWSWIRES
TOKYO (DowJones)--Canadian National Railway Co. (CNI) and some Chinese companies are intalks about possible exports of crude oil produced in Canada's inland provinceof Saskatchewan via railway to a West Coast port, Saskatchewan's energy andresources minister said Monday.
"Webelieve this has a real potential," said the minister, Bill Boyd. Hedidn't specify which ports or oil fields might be used, adding that thediscussions are at "a very early stage."
Saskatchewan-- the second largest oil-producing province in Canada after Alberta as of theend of 2009 -- has recoverable reserves of 1.2 billion barrels of crude.
The U.S.is the major export market for Canadian crude oil.
Canada hasvast deposits of oil, although nearly all its estimated 178 billion barrels ofreserves -- second only to those in Saudi Arabia -- are in oil sands.
Aspokeswoman for Canadian National Railway confirmed it is in discussions withseveral Canadian oil producers to ship oil to West Coast ports, possibly torefineries on the U.S. West Coast, as well as Asia. One of Saskatchewan'slargest energy producers, PetroBakken Energy Ltd. (PBN.T), said it isparticipating in those discussions.
"Itmakes good business sense to have more than one customer," both in termsof sales volumes and the possibility of having stronger prices, SaskatchewanEnergy Minister Boyd said.
"Thereare a number of locations" from which crude produced in the province couldbe sent by train to the Pacific coast, he said, and this could involve buildinglines linking oil fields to existing main lines. Chinese companies appear to be"very interested in this opportunity" too, he added.
Last week,another Saskatchewan official said a "significant" energy deal was inthe works between China and the province.
RichardChoi, the head of Saskatchewan's trade and investment representative office inShanghai, said a deal could be finalized in May. It is unclear whether thatdeal is related to the talks regarding shipments of crude to the coast by rail.
Theremarks from the two provincial officials follow news Thursday that state-ownedChina Petroleum & Chemical Corp., or Sinopec, is among a consortium ofCanadian oil producers and Asian refiners investing US$100 million in EnbridgeInc.'s proposed Northern Gateway pipeline.
Thatproject, which is awaiting approval, aims to pipe 525,000 barrels of crude oila day from Canada's oil-sands region to a port in British Columbia, from whereit would be shipped to Asian markets.
China,which has been investing aggressively in energy assets globally to feed itsrapidly growing economy, clearly has set its sights on Canada.
Last year,Sinopec bought a 9% stake in Syncrude, Canada's largest oil-sands project, forUS$4.65 billion, while state investment agency China Investment Corp. bought a45% stake in an oil-sands project owned by Penn West Energy Trust for 817million Canadian dollars (US$821 million).
In 2009,PetroChina Co. bought a majority stake in Athabasca Oil Sands Corp. for US$1.7billion.
Boyd andaccompanying officials are touring China and Japan from Jan. 16 to Jan. 28.
In China,Boyd met with officials of China's National Development and Reform Commission,the China National Petroleum Corp., the China National Nuclear Corp. andChina's National Energy Administration, among others.
In Japanthis week he plans to meet with officials of the Japan Coal Energy Center,Idemitsu Kosan Co., Tokyo Electric Power Co., Japan Canada Uranium Co. andOverseas Uranium Resources Development Co. The last two are joint venturesinvolving Japanese utilities investing in uranium mines.
Chinabecame the world's second-largest crude-oil importer after the U.S. in 2009,and the world's second-largest economy after the U.S. in 2010.
It isbecoming increasingly dependent on imported energy. In 2010 China imported anaverage of 4.81 million barrels a day of crude oil, up 18% from the previousyear.
-By MariIwata, Dow Jones Newswires; 813-6269-2798; mari.iwata@dowjones.com