Rongsheng Petrochemical Co., already the largest buyer of crude from Canada's sole West Coast pipeline, is considering an agreement to purchase oil from Alberta's next major project—a proposed one-million-barrel-per-day pipeline to British Columbia—according to sources familiar with the matter.
Potential Deal Details
The Chinese refinery is evaluating a deal after Alberta approached the privately owned company regarding a binding contract, said the sources, who requested anonymity as they were not authorized to speak publicly. Rongsheng did not immediately respond to requests for comment, nor did the Alberta energy minister's office.
A potential agreement would reduce Alberta's reliance on the United States at a time when Canada-U.S. relations are increasingly strained by the Trump administration's tariff policies. Such a contract could also support Alberta Premier Danielle Smith's goal of eventually doubling oil production in the province and increasing sales to Asia. She is seeking private sector investors to eventually take over the project.
Current Operations and Context
Rongsheng currently uses heavy crude from the Trans Mountain Pipeline at its 800,000-barrel-per-day refinery on China's east coast. The recently expanded conduit, which runs from Alberta to the Vancouver area and began operations in 2024, is currently the only system transporting crude to Canada's Pacific export terminal.
Brian Jean, Alberta's energy minister, said at a conference last week in Calgary that he has spoken to "some companies in Korea and Japan" about an investment or long-term offtake agreement for the project.
Project Timeline and Challenges
Alberta plans to announce project details, including the planned route, by July. The project will be subject to federal approval by October, with construction potentially starting as early as late next year. Alberta's preferred route to the northern B.C. coast faces strong opposition from Indigenous groups in the area as well as British Columbia Premier David Eby.
Canadian Prime Minister Mark Carney has pledged to support the new pipeline in exchange for a series of measures, including a higher industrial carbon tax and the deployment of a long-planned carbon capture project in the oil sands, called Pathways, to reduce emissions.
This development comes as China seeks to diversify its oil sources, and as Alberta aims to secure new markets for its growing oil production. The proposed pipeline could significantly reshape oil trade flows between Canada and Asia.
