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(Reuters) – The government of Alberta, Canada’s main oil-producing province, is in talks to export more crude oil to Japan and reduce that country’s reliance on the Middle East, the province’s Energy Minister Brian Jean said in an interview on Monday.
Alberta has offered to help fund the construction of a coker unit that would enable one or more Japanese companies to process heavy crude produced in Alberta’s oil sands, Jean said. The province also is exploring whether Alberta heavy crude could be combined with a lighter, synthetic oil to make a blend more suitable for Japanese refiners, Jean added.
“We want to work with them to make sure that they’re able to take our oil over a long period of time,” said Jean, who was in Japan last week for in-person talks with Japanese government and company officials.
“We want to listen to our customers and provide what they want,” Jean said. Reuters first reported Alberta’s ambition to potentially invest in Japan’s refining sector last year. Japan currently imports about 95% of its crude oil from the Middle East, a concentration that is widely seen as a major energy security risk, particularly in light of the Iran war that halted flows through the Strait of Hormuz.
At the same time, Canada has been eager to diversify its exports due to uncertainty around U.S. President Donald Trump’s trade policies. Canada, the world’s fourth-largest oil producer, currently sends about 90% of its crude exports to the United States via southbound pipelines. The opening of the east-west Trans Mountain pipeline expansion in 2024 increased Canada’s ability to move its oil to the Pacific for export to Asia, where China is now the top buyer on that continent of Canadian crude. The pipeline is now running at full capacity.
While Japan has bought cargoes of Trans Mountain crude on rare occasions, its existing refinery facilities generally are not compatible with the heavy, high-sulfur oil produced in the Canadian oil sands.
Jean said he met last week with officials from the Japan Organization for Metals and Energy Security (JOGMEC), the Japan Bank for International Cooperation (JBIC) and the Ministry of Economy, Trade and Industry (METI), as well as refiners, steelmakers and energy traders. Jean said talks are ongoing.
Alberta’s proposal could help to make the case for a new, 1 million bpd oil export pipeline to the west coast, a project for which the province has been lobbying. The Alberta government has said it will unveil by July 1 its proposal for that pipeline, which no private company has yet committed to building.
Oil production in Canada is growing, with output in 2026 expected to exceed last year’s record of 5.3 million bpd.
Reporting by Amanda Stephenson in Calgary; Editing by Will Dunham
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