Chinese energy giant eyes Canadian natural gas project

The deal is already facing backlash from a prominent environmentalist and First Nations rights advocate

The Chinese oil and gas company Sinopec is in talks to buy a stake in a $15 billion natural gas export project in British Columbia.
Tomohiro Ohsumi/Bloomberg/Getty Images

China's largest state-owned oil and gas company, Sinopec, is reportedly in talks to invest in a multibillion-dollar natural gas export project in North America.

An advocate for First Nations rights and environmental protectionism told Al Jazeera that China's burgeoning investment in Canadian energy is facilitating a free-trade agreement that would essentially allow Beijing to nullify Canadian indigenous peoples' rights to resources.

A Sinopec executive in North America acknowledged that the company is in talks to buy a stake in the $15 billion Kitimat LNG project — which liquefies natural gas for ease of transport — in northern British Columbia, but declined to comment, saying all media requests must be directed at Sinopec's Beijing headquarters.

Sinopec's Beijing staff was not immediately available for comment.

U.S. energy giants Chevron and Apache each currently own a 50 percent stake in the project, which aims to export natural gas from the Horn River and Liard fields in British Columbia to Asia.

While Apache spokesman Bill Mintz would not comment on the talks, he confirmed that "we're in the phase where we're looking for customers who want to buy natural gas."

"It's not unusual for LNG customers to also buy equity stakes in large LNG projects like this," he added.

In October, China surpassed the U.S. to become the world's biggest net oil importer. Amid turmoil in the Middle East, market analysts have told Al Jazeera that Beijing is looking to more stable political climates to field the energy imports necessary to fuel its economic growth.

Canada has been a primary target, but it hasn't been easy for Chinese companies attempting to navigate inroads into Canadian energy.  

In February, another state-owned Chinese energy company, CNOOC, bought Canadian oil and gas giant Nexen for $15.1 billion. The takeover prompted a public backlash from Canadians worried that China would export its overwhelming environmental issues to North America.

Canada's British Columbia-based, 300-person-strong Hupacasath First Nation has mounted a widely publicized legal petition against the administration of Canadian Prime Minister Stephen Harper for not consulting with First Nations before pushing forward with the Canada-China Foreign Investment Protection Agreement (FIPA).

Canadian legal analysts have said the FIPA would allow Chinese companies to sue local Canadian governments for measures deemed prejudicial to their interests.

Brenda Sayers, the Hupacasath member charged with mounting her band's offensive, told Al Jazeera the FIPA would essentially override the First Nations' constitutionally protected right to resources.

Sayers said that she fears Chinese investments like the potential Kitimat deal — which have amounted to $27 billion since 2005, by her estimates — will incentivize legislators to push even harder for the FIPA.

Such an investment "gives them a lot of power in this country," she said.

Sayers said the Hupacasath are preparing a case to file in a provincial appeals court, after previous efforts to block the FIPA were unsuccessful.

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