Canada urged to invest in oil infrastructure

calgary — The Opec president urged Canada on Tuesday to invest in infrastructure to move oil and gas, or risk watching investment flow away to the US.

The Canadian government agreed in May to buy the Trans Mountain oil pipeline and a related expansion project from Kinder Morgan Canada for C$4.5 billion ($3.4 billion), highlighting the lengths deemed necessary to overcome stiff opposition to such projects.

Insufficient space in the country’s oil pipelines has deepened the discount Canada’s heavy crude can attract from US refiners, compared with US light oil futures.

“If you don’t have a the major infrastructure, investors are going to go to your neighbour, where infrastructure is not an issue,” said Suhail bin Mohammed Faraj Faris Al Mazrouei, president of Organisation of the Petroleum Exporting Countries. “Act and act quickly if you want to retain those investors. I am being frank because I want to be a true friend to the Canadians.”

“I don’t want them to lose opportunities.”

Al Mazrouei was speaking in Calgary at a TD investor conference during the city’s Stampede, an annual rodeo that is also the year’s major meet and greet for Canada’s energy sector.

Al Mazrouei, the UAE’s minister of energy and industry, also singled out Canada’s low-priced natural gas. Much of it is produced in landlocked Alberta, and the country lacks a robust liquefied natural gas (LNG) export sector to consume it.

“The solution is LNG and pipelines to export that natural gas,” Al Mazrouei said. “If you provide optionality for the gas, it’s going to fix itself.”