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India is becoming increasingly interested in Canadian oil in its effort to reduce energy dependence on the Middle East, and Canada is interested in India as a customer with a growing demand for its oil.
“OPEC is an important club for our crude oil procurement, but simultaneously we would like to diversify our strategy and go by our economic interests and long-term relations,” India’s oil minister, Dharmendra Pradhan, said July 5 at the second India-Canada Ministerial Energy Dialogue in Calgary.
Already, Pradhan said, India has been increasing oil imports from both West Africa and Latin America, and would like to buy more oil from Canada, too. He said the state-owned Indian Oil Corp. (IOC) has a new refinery in Paradip, on the country’s northeast coast, capable of processing 300,000 barrels per day of the heavy tar sands from Western Canada, something other Indian refiners can’t handle.
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As a result, he said, “[c]ompared with our 2013 import of 3 million barrels per day, we see that figure doubling to 6 million barrels per day by 2030, based on current forecasts. Our appetite as an energy consumer will grow substantially, and we are keen on engaging the Canadians in a bigger way.”
IOC’s CEO, B. Ashok, agreed, saying only two issues need to be resolved before India can increase its import of Canadian oil: “economics,” he said without elaborating, and “finding a way to deliver [the crude] to Indian shores.”
At the Calgary forum, Pradhan met with his Canadian counterpart, Greg Rickford, the minister of natural resources, who said his country is eager to expand energy trade with India.
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“Canada’s growing energy relationship with India is helping create jobs and long-term prosperity for both of our countries,” Rickford said. “We stand ready to expand our strategic partnership through greater cooperation based on our complementarity of energy interests.”
The government in Ottawa has portrayed Canada as a country that can reliably and responsibly produce enough energy to meet the rapidly growing needs of India.
In 2012, India was the fourth-largest consumer of energy in the world, but recent data from the International Monetary Fund show that its economy will be the fastest growing in the coming decade. And the International Energy Agency says India’s growth in demand for oil will be the greatest between 2013 and 2040.
India and Canada aren’t new to energy trade. That began in 2009, and by 2014 India was importing more than 1,500 barrels of Canadian crude oil per day. It also plans to buy more than 7 million pounds of Canadian uranium by 2020.
New Delhi also has expressed interest in buying gas from Canada, and Ottawa says the country could supply much of the 44 billion cubic meters of gas that India is expected to import in the next 10 years.
During their talks in Calgary, Pradhan and Rickford also discussed ways for India to increase its involvement in mining and extracting Canadian oil sands, along with Canadian investment in India’s energy infrastructure, which would include fossil fuels but also solar and wind energy as well as carbon capture and storage.
By Andy Tully Of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com