Canada to boost oil exports amid increasing sanctions against Russia

Canada will increase oil and gas exports by the equivalent of 300,000 barrels a day to help nations that are trying to shift away from Russian supplies, the country’s resources minister said.

Energy producers can raise shipments of crude by 200,000 barrels a day and natural gas by the equivalent of 100,000 by year-end by accelerating planned projects to expand output, Jonathan Wilkinson said Thursday at a press conference in Paris. Canada and the U.S. already have the pipeline capacity to handle the extra volumes, with some of the extra oil expected to be shipped to Europe via the Gulf Coast, he said.

“Canada indicated to our European friends that we will work to help them in the current situation that they find themselves,” he said.

The Canadian government is also in discussions with European countries about eventually supplying them with liquefied natural gas, but any export facility would need to be eventually convertible to exporting hydrogen as part of a planned pivot away from hydrocarbons, Wilkinson said.

Clydeport Container Terminal, Firth of Clyde
Clydeport Container Terminal, Firth of Clyde by Johnny Durnan is licensed under CC-BY-SA 2.0

Canada has no LNG export terminals yet, but a consortium that includes Shell Plc and Malaysia’s Petroliam Nasional Bhd is building a large one on the Canada’s west coast that is expected to be ready by the middle of the decade.

Read more: Indonesian Tycoon’s Firm to Spend $500 Million on Canada LNG

Wilkinson’s comments came as major oil and gas consumers pledged “radical” cutbacks in imports from Russia at the International Energy Agency’s annual ministerial meeting in the French capital.

Canada, the world’s fourth-largest oil producer, faces constraints in rapidly raising output. It currently produces more than 5 million barrels a day of liquid hydrocarbons, but the country’s pipeline network for exports is limited.

Mines and wells in Alberta’s oil sands, where most of the crude is produced, normally run near capacity, except when undergoing maintenance, and expanding them can take years. Some producers of conventional oil are planning to drill more wells but not until later in the year.

Calgary-based Enbridge Inc., North America’s largest pipeline company, said on March 10 that it was in discussions with the Canadian government about how to relieve the current “energy crises” but warned that pipeline systems are currently at or near capacity.

The plans to raise shipments of oil and gas don’t negate Canada’s goal of cutting emissions, Wilkinson said, adding that European countries aren’t just focused on finding oil and gas to replace Russian hydrocarbons, but are also looking at accelerating a move toward renewable fuels to replace Russian fossil fuels.

“Canada is very open to discussion about how we can help, but help in a manner that is consistent with long-term climate objectives,” he said.