China wants our crude, Canada says

Canada expects strong interest in its heavy crude oil reserves from China after the U.S. government balked on a major oil pipeline project, the government said.

The U.S. State Department last week said it was reviewing alternate routes for the planned Keystone XL pipeline to avoid environmentally sensitive territory in Nebraska. That decision could move final approval, originally expected at the end of this year, to after the 2012 presidential elections in the United States.

Canadian Prime Minister Stephen Harper said during a meeting with Asian trading partners in Hawaii that the State Department’s decision highlighted the importance of working closer with the Chinese.

“This does underscore the necessity of Canada making sure that we are able to access Asia markets for our energy products,” he was quoted by The Wall Street Journal as saying. “And that will be an important priority of our government going forward.”

The Canadian government said a heavy crude oil pipeline would get built to carry oil from tar sands projects in Alberta province one way or the other. The direction of that pipeline would depend on the end consumer.

Harper, in a statement, said he was disappointed with the U.S. government on the pipeline. TransCanada, the company behind Keystone XL, said they expected the project would be approved eventually.

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