Skip to main content

Douglas Channel, the proposed termination point for an oil pipeline in the Enbridge Northern Gateway Project, is pictured in an aerial view in Kitimat, B.C., on January 10, 2012.DARRYL DYCK/The Canadian Press

India is often rumoured to be in the running when energy assets – and entire companies – come up for sale in Canada. The growing Asian giant needs oil and gas, and its national oil companies sport fat wallets.

But they haven't made a major move. Chinese energy firms have gobbled up a slew of assets, including Nexen Inc., one of Canada's largest oil and gas companies. Foreign investment rules have since changed, limiting state-owned companies to minority positions, but there's plenty of room for India to jump into the game.

A. M. K. Sinha, Indian Oil Corp. Ltd..'s director of planning and business development, said his company is leery about Canada's inability to get oil and gas overseas.

"Mainly, I would say, these are infrastructure problems. Pipelines, basically," he told reporters at a conference in Calgary Thursday. "West coast is not that attractive for India. We are more looking at the eastern coast."

Tankers leaving Canada's east coast can get to India's west coast refining hub more quickly than if they left from the west coast. TransCanada Corp. is now considering revamping its system so oil can move to Quebec and perhaps beyond. Meanwhile, lines terminating on the west coast are under extreme pressure, which is partly why the idea of a west-to-east line is gaining momentum.

Enbridge Inc. is facing fierce opposition in its quest to build the Northern Gateway pipeline westward, while Kinder Morgan Inc. faces similar angst over its desire to twin its Trans Mountain line.

India wants to diversify its sources of oil, and has pegged Canada as a possible source, particularly as Alberta's heavy oil production is likely to increase, Mr. Sinha said.

"And naturally the prices also will be, I would say, preferred," he said. Indian Oil, however, wants exporting to take off, rather than equity investments. "Exporting and bringing the oil or gas in the form of LNG would be a preferred way of getting into Canada," Mr. Sinha said. Equity investments are still on the table, although the idea is on the back burner.

"I'm not saying that channel is closed. We may be doing that as well. But in the immediate term, or the mid-term, we would say that we would be interested to take the product, the commodity, from here to India."

Indian Oil, India's largest company by sales, is also nervous about how regulations are affecting pipeline development.

"Once they are taken care, I'm sure there will be more and more joining hands of Indian and Canadian companies," Mr. Sinha said.

(Carrie Tait is a Globe and Mail Energy Reporter.)

Return to Streetwise home page.

Report an error

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 18/03/24 4:00pm EDT.

SymbolName% changeLast
ENB-N
Enbridge Inc
0%35.52
ENB-T
Enbridge Inc
+0.06%48.09
KMI-N
Kinder Morgan
+0.23%17.64
TRP-N
TC Energy Corp
+0.17%40.28
TRP-T
TC Energy Corp
+0.06%54.52

Interact with The Globe