India is set to significantly boost its imports of Canadian oil and liquefied natural gas (LNG) to support its booming economy, according to Natural Resources Minister Tim Hodgson. Following his recent discussions at India Energy Week in Goa, Hodgson highlighted the potential for a robust economic partnership that could see bilateral trade soar to £70 billion annually by 2030. This agreement would encompass not only energy but also critical minerals, agricultural products, clean technologies, and advanced manufacturing.
Expanding Energy Partnerships
Hodgson remarked that the increasing energy shipments would be pivotal in strengthening the economic ties between Canada and India. Currently, Canada provides approximately 150,000 barrels of crude oil daily to India, which primarily sources its oil from other countries like Iraq, importing around one million barrels a day. The minister expressed optimism for expanding this capacity through either an upgraded Trans Mountain pipeline or a new pipeline to the Pacific Coast, which would offer shorter shipping times and improved economic viability for India.
“They were very clear with me: They would love to be able to get it off our West Coast, which has significantly shorter shipping times,” Hodgson noted. This move could allow Canada to play a larger role in meeting India’s energy needs as the country currently imports nearly all of its crude oil consumption, which totals around six million barrels daily.
Divergent Views on Infrastructure Development
At a recent First Ministers meeting in Ottawa, discussions around expanding the Trans Mountain pipeline were met with a mixed reception. British Columbia Premier David Eby and Alberta Premier Danielle Smith acknowledged the potential for increased capacity but faced differing opinions on new pipeline projects, particularly one proposed for northern British Columbia. Eby remains opposed to this initiative, which has drawn significant pushback from local First Nations.
Despite these challenges, both provinces seem aligned on further developing LNG infrastructure. Hodgson pointed out that India aspires to raise its LNG share in the energy mix from 6 per cent to 15 per cent by 2030, which opens new avenues for Canadian LNG exports.
Navigating Diplomatic Tensions
The relationship between Canada and India has faced strains, particularly following allegations made by former Prime Minister Justin Trudeau regarding India’s involvement in the assassination of a Canadian Sikh leader. Hodgson addressed these tensions, reiterating Canada’s stance on national sovereignty and foreign interference, while emphasising the importance of focusing on mutual interests, particularly in trade.
Hodgson referred to Prime Minister Mark Carney’s recent remarks in Davos, where he advocated for pragmatic engagement with global partners. “Canada will have calibrated relationships around the world,” he said, indicating a desire to move forward constructively despite past conflicts.
Future Opportunities for Canadian Exports
The conversation surrounding the potential expansion of the northern port of Churchill, Manitoba, to facilitate oil and gas exports to India adds another layer of complexity to Canada’s energy strategy. Manitoba Premier Wab Kinew mentioned that a major energy company is exploring this option, despite the port’s current limitations due to a short shipping season. Climate change is expected to extend this season, potentially making the port more viable for energy exports in the future.
The Arctic Gateway Group, which operates the port, has acknowledged ongoing discussions with western resource companies, highlighting the vast potential for Canadian resources to reach global markets.
Why it Matters
The intent to increase Canadian energy exports to India signifies a strategic pivot for both nations, with the potential to reshape global energy dynamics. As India seeks to diversify its energy sources amid a growing economy and a commitment to sustainability, Canada stands to benefit from this burgeoning market. Strengthening these ties not only promotes economic growth but also reinforces Canada’s position in the competitive global energy landscape, all while navigating the complexities of international relations with sensitivity and pragmatism.
