The thinking on the oilsands side is different, however. Bruce March said Imperial has signed on to neither Enbridge's nor Kinder Morgan's proposals to link oilsands crude to Asia via the West Coast, as it expects the U.S. to remain a strong market for Canadian crude for decades to come.
March said its LNG — or liquefied natural gas — plans are in the very early stages and a site has not yet been chosen for a plant to cool natural gas into a liquid state, enabling it to be transported by tanker overseas.
The acreage Imperial (TSX:IMO) has in northeastern British Columbia's Horn River Basin contains dry gas, which is trading at 10-year lows around US$2 per 1,000 cubic feet. Several companies have been ditching dry gas drilling in favour of areas that contain more lucrative liquids.
In Asia, the fuel would be worth about five times more than it currently is in North America, where burgeoning supplies from shale formations across the continent have far outpaced demand.
"There appears to be huge and substantial growth opportunities for gas demand in Asia," March told reporters following Imperial's annual meeting.
"That's the most promising sign. That, in combination with the near-term outlook for gas in North America, makes this an opportunity that a lot of companies look at, including ours."
Encana Corp. (TSX:ECA) and U.S. partners Apache and EOG are furthest along in their plans to build an LNG plant in Kitimat, B.C. Shell also has a proposal in the works, and Nexen Inc. (TSX:NXY) and Talisman (TSX:TLM) are weighing their LNG options, too.
March said Imperial has not committed to ship crude from its vast oilsands operations on Enbridge's Northern Gateway pipeline to Kitimat or Kinder Morgan's expanded Trans Mountain line to the B.C. Lower Mainland.
"I can confirm that we haven't done anything with either at this time," he said.
"You have to make an opinion yourself of how fast they will go forward," March said of the West Coast proposals, which have drawn controversy for their potential environmental impacts.
Five other oilsands producers — Suncor Energy Inc. (TSX:SU), MEG Energy (TSX:MEG), Nexen, Total E&P Canada and Cenovus Energy Inc. (TSX:CVE) — have revealed themselves as Northern Gateway backers. Many in the industry want to diversify Canada's energy export markets beyond the U.S. and believe they can get a better price for their product in energy-hungry Asia.
The $5.5-billion Northern Gateway proposal is in the midst of a lengthy regulatory process that isn't expected to wrap up until late 2013. It's faced stiff opposition from First Nations groups in B.C. who fear a spill could damage the local ecosystem.
If built, it would ship 525,000 barrels per day from Alberta to Kitimat and 193,000 barrels of imported condensates inland for use in the oilsands.
The Trans Mountain line currently delivers 300,000 barrels of crude to the B.C. Lower Mainland daily, and concerns have been raised about more oil tankers sailing in and out of the Vancouver area if it's expanded to carry 850,000 barrels per day.
The U.S. will continue to be thirsty for Canada's oil for a long time, as refineries in the Gulf Coast are already configured to handle heavy crude, like that from the oilsands, March said.
"Gosh, you know, when you look at the capacity for the Gulf Coast refineries to run the diluted bitumen crudes that will likely be the growth crudes, if you could get the pipeline capacity to it, it would be decades before we would fill that," he said.
March said he expects TransCanada Corp.'s (TSX:TRP) Keystone XL system between Alberta and the Texas coast will be approved in its entirety after the U.S. presidential election in November, no matter which party wins.
He expects proposals by Enbridge Inc. to get more Canadian crude to the Gulf, including the reversal and twinning of the Seaway pipeline between the Gulf and Cushing, Okla., to go ahead as well.
Imperial shares dropped four cents to $45.93 on the Toronto Stock Exchange.Suggest a correction