Alberta Eyes Japanese refining investment to stimulate oil exports, say sources

Alberta is considering a financial investment in the Japan refining sector, two sources familiar with the case in Reuters said.

It is an attempt to reduce the overwhelming dependence of the province with regard to the United States trading partner for oil exports.

The government of Alberta is in talks in the start -up phase with several Japanese crude crude oil refiners to explore a joint venture in which it could help finance the construction of a coker unit which would allow one or more Japanese companies to treat the heavy gross product in the bituminous sands of Alberta, according to sources.

Any agreement would be unprecedented for Alberta, which has not made any energy infrastructure investments in foreign countries. But the province is to increase its oil exports since last year opening the expansion of the Trans Mountain pipeline, which increased Canada’s capacity to ship oil via the Pacific coast.

An agreement with Japan would help strengthen oil flows on Trans Mountain – the only east -west oil pipeline – and also help to plead in favor of a new export pipeline for which the Alberta government is pressure.

Canada and Japan discussions on an investment are at very early stages, and nothing has been finalized, according to one of the sources.

For Japan, a coker would move the amount of heavy crude, like Canadian oil, which can be transformed in the country.

The heavy and high Canadian crude is currently incompatible with most existing refining facilities in Japan, and the country now imports most of its Middle East oil.

Higher Canadian crude purchases that can transit directly through the peaceful ocean would also reduce Japan’s dependence on expeditions through the Southern China Sea, a maritime strangulation point if regional tensions arise.

Canada is the fourth world oil producer, but its main petroleum producing province in Alberta is landlocked, with limited access to Tidewater ports. This means that most of the Canadian oil – around 4 million barrels per day or 90% of its total exports – is sent to the United States via pipelines that operate in North -South.

Representatives of the Alberta government have made several trips to Asia, in particular Japan and South Korea, in order to stimulate interest in Canadian oil.

“Alberta explores opportunities in Japan to sell our light and heavy oil,” said Alberta Minister of Energy, Brian Jean, in a statement sent by email. He refused to comment whether the Alberta government was in talks to invest in the Japan refining sector.

The Federal Government of Canada is aware of current opportunities for Japan to buy additional volumes of Canadian oil, said Tim Hodgson, spokesperson for the Federal Minister for Natural Resources.

“Natural Resources Canada (NRCAN) closely monitors developments and remains open to a partnership with the provinces and industry to support strategic energy projects that advance national interests in Canada,” the spokesman said in an email.

Last year, an expansion of the Trans Mountain pipeline tripled its capacity at 890,000 barrels per day and opened opportunities for Canadian oil along the American West Coast and on Asian markets.

China has become the best buyer of the Canadian crude brut shipped via the Trans Mountain pipeline, followed by the American West Coast. South Korea recently intensified purchases, fifty in third place, while Japan, India, Singapore, Brunei and Taiwan bought cargo on rare occasions.

Since the expansion, Japan Eneos Holdings has bought a cargo of 250,000 barrels last year and so far this year has bought a cargo of 550,000 barrels, according to KPLER ships monitoring.

The operator of the Trans Mountain pipeline also plans a series of projects aimed at increasing the capacity of the system from 200,000 to 300,000 barrels per day.

Meanwhile, the government of Alberta is eager to increase the production of oil in the province and has put pressure on pipeline companies in the hope of encouraging a private sector company to build a new crude oil export duct to the northwest coast of Canada. Canada exported an average of 4.2 million b / d of oil in 2024, or about 80% of its total production.