China is expanding its beachhead in Alberta's oil sands, and for the first time has secured the right to ship Canadian oil into its home market.
Sinopec Group has bought a 40-per-cent stake in Synenco Energy Inc.'s planned bitumen-mining operation for $105-million, committing the Chinese state oil firm to a much larger outlay of nearly $2-billion once construction begins on the Northern Lights project.
It is the second time a Chinese state oil company has invested in the oil sands, with the first purchase coming in April when China National Offshore Oil Corp. (CNOOC) bought a one-sixth share in Calgary-based MEG Energy Corp. for $150-million. However, this latest sortie gives China direct control over its share of the crude produced from Northern Lights, allowing Sinopec to ship oil across the Pacific.
That is a historic breakthrough for the oil sands sector, as a new market opens up, as well as a potential headache for U.S. policy makers who face unfamiliar competition for Canadian crude.
The Globe and Mail
