- Beijing issued a scathing rebuke Thursday of the Harper government's unwillingness to attract Chinese investment and help sell Canadian oil to the Far East, as the state oil company PetroChina said it was withdrawing support for a major pipeline between Alberta's oil sands and a West Coast port.
A senior Chinese oil executive blamed Ottawa for not doing more to help start the $4-billion Gateway pipeline project, which has been delayed by a lack of support from Canadian firms and challenged by native land claims along the proposed route to the Pacific coast.
Yiwu Song, vice-president of China National Petroleum Corp., one of the world's largest oil companies and parent of PetroChina, said Beijing felt the delays reflected an unwillingness to allow Chinese firms into Canadian markets. He added that China could find similar crude supplies elsewhere, notably Venezuela.
"The environment is not comfortable. We tried to come here and we can't," Mr. Song said during an investment conference in Calgary.
"We sincerely wanted to do something and open up a new market for Canadian crude … but Canada doesn't want to open up its own markets to us. So we cannot co-operate, and I really don't know how to help."
PetroChina had agreed in principle with Enbridge Inc., the Calgary-based pipeline company behind the Gateway project, to purchase half the crude from the pipeline's proposed flow of 400,000 barrels a day.
But Mr. Song said repeated delays in the project have cost Canada his company's confidence. Enbridge had already pushed back the pipeline's expected completion from 2009 to an unspecified date between 2012 and 2014. Last month, according to Mr. Song, Enbridge officials pressed PetroChina to commit itself more fully to the project, but the company refused.
In unusual public criticism by a Chinese official, Mr. Song also blamed Canadian oil producers for the lack of progress on Gateway, saying shippers weren't willing to open their domestic market for Chinese participation or commit enough supplies to the pipeline to make it viable. (Historically, a lack of pipeline and port infrastructure has meant that almost all Canadian oil exports are shipped to the U.S. Midwest.)
Other problems for the pipeline include local opposition and unresolved land claims between the federal government and aboriginal groups - the same thorny issue that has stalled development of Imperial Oil's Mackenzie Valley pipeline.
Environmental groups have raised concern over increased oil tanker traffic off the B.C. coast, while a coalition of native groups filed a federal court action against the project last year, alleging they haven't been properly consulted.
Enbridge has denied that these issues will delay the pipeline, but Mr. Song singled out the federal government for not resolving them, saying, "In my country, for a project this big, the government has to support it."
Asked whether the previous government of Paul Martin was more supportive to Chinese firms, Mr. Song replied, "That's for sure. They were more positive and understood our business."
He added that CNPC's experience of doing business in Canada was negative when compared to its involvement in Venezuela, noting that the company had been able to advance major projects more rapidly there.
Despite the rhetoric, CNPC isn't pulling out of Canada altogether. The company acquired 11 oil leases in Alberta this year, upon which it ultimately hopes to build an oil sands project. Mr. Song said that the acquisition is a change in CNPC's Canadian strategy that's fuelled by the Gateway delay.
While PetroChina has no interest in pursuing Gateway for now, the company did "still carry some hope that this might happen [in the future]" Mr. Song said, adding that he had no complaints about working with Enbridge, whose executives "tried very hard to get us set up with Canadian producers, but it didn't work."
Enbridge spokesman Glenn Herchak said it wouldn't be appropriate to comment on Mr. Song's remarks. He added that the terms of Enbridge's agreement with PetroChina were confidential.
"While China could be a market for Gateway volumes, other Asia-Pacific countries and California could be potential markets for the crude," Mr. Herchak said. "We are still looking at the Gateway pipeline in the 2012-2014 timeline."