The Port of Vancouver has emerged as a lifeline for Asian oil refiners amid disruption of the vital shipping route through the Strait of Hormuz, according to ATB Cormark Capital Markets.

Tankers calling at the port’s Westridge Marine Terminal now have access to an expanded, reliable supply of oil from Alberta, thanks to the Trans Mountain pipeline. 

Not only do these barrels have clear sailing to Asian ports, analysts say they’re just the type of oil Asian refiners are increasingly looking for. 

About half the oil flowing through the pipeline is considered “heavy,” one of the grades most affected by the Strait of Hormuz closure, ATB said.

“Canadian heavy oil could become a premium global asset,” managing director of institutional equity research Patrick O’Rourke wrote on Mar. 2.

SAGD oil sands project in northern Alberta. Photo courtesy Cenovus Energy

Stability in a volatile market

It’s a sentiment that was building before the new conflict in the Middle East.

“Beyond price, Canada offers something increasingly valuable — a large, stable and reliable supply of heavy crude,” Studio.Energy director of research Carmen Velasquez wrote in November. 

“At a time when geopolitical risk is reshaping energy trade flows…this reliability is becoming a strategic differentiator, not just a commercial one.” 

Why heavy oil matters

Exported mainly from Alberta’s oil sands, heavy oil is one of Canada’s biggest energy assets. 

Thick and gooey, it requires diluent for transportation and complex processing to produce gasoline, jet fuel and petrochemicals used in everyday items.

The large-scale petrochemical refineries in Asia that are driving oil demand growth can pair well with Alberta’s heavy oil, Velasquez said.

“In recent years, [China] has invested heavily in new mega-refineries and upgraded existing ones to handle heavier and more complex crude slates,” she said.

Zhejiang Petrochemical Complex in in Zhejiang, China. Photo courtesy Zhejiang Petroleum and Chemical Co.

Asia’s growing appetite

China is Asia’s “heavy oil hub,” RBC director of energy policy Shaz Merwat wrote in a November research note. 

“China is sharply pivoting into petrochemicals, aiming to take Japanese and Korean market share,” Merwat said. 

“India, too, is expected to see oil imports grow 1.5 million barrels per day by 2035 as both countries seek steady supplies of heavy and sour crude,” he said. 

“Today, that supply originates from the Middle East, Russia and Venezuela, creating an opening for a stable, Western entrant.”

Canadian barrels gaining a foothold

Canadian heavy oil has started building a footprint in Asia thanks to the Trans Mountain expansion and “re-exports” — Western Canadian barrels shipped from terminals on the U.S. Gulf Coast.

Both China and India have purchased Canadian oil from Trans Mountain since the expanded pipeline went into service in May 2024, the company reports.

Courtesy Trans Mountain Corporation

While China leads overseas sales from Trans Mountain, India is a regular buyer of U.S. Gulf Coast re-exports, according to RBN Energy.

Courtesy RBN Energy

Demand keeps climbing

“Besides ongoing efforts to expand the Chinese customer base, India and Southeast Asia are the most promising growth markets for Canadian crude,” Studio.Energy’s Velasquez said. 

“And this is no small opportunity.”

The International Energy Agency projects oil demand in the Asia-Pacific region will rise to 41 million barrels per day by 2050, up from 35 million barrels per day in 2024.

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On frigid winter nights in northern Alberta, the glow from the outdoor hockey rink warms Tyler Letendre’s heart. 

This year more than ever, the lights are bright, the ice is smooth, and the boards are solid — built to last, not patched together year after year like they used to be.

For Letendre, the operations manager and economic development officer for Peerless Trout First Nation (PTFN), the rink is more than a place for friends and families to get together to skate. It’s proof that something fundamental has changed in his community.

“Two years ago, this wouldn’t have been possible,” Letendre says. “Now, it’s something our kids can rely on.”

The transformation didn’t come from a one-time grant or a short-term program. 

It came from equity ownership in energy infrastructure — a model that is quietly reshaping how Indigenous communities build wealth, plan for the future, and assert economic self-determination.

Why ownership matters in remote communities

Photo courtesy Peerless Trout First Nation

Peerless Trout First Nation is a rural, semi-isolated community in northern Alberta. Its two main settlements sit 29 kilometres apart, meaning the Nation must often build and maintain two of everything, from roads to recreation facilities.

“In communities like ours, location matters,” Letendre explains. 

“If you’re near a major city, like Tsuu T’ina or Enoch, business development is easier. If you’re not, it’s very hard to generate own-source revenue.”

For PTFN, oil and gas development in the region created opportunity.

In 2023, the Nation and 11 other communities acquired an 85 per cent stake in $172 million in oil and gas pipeline assets operated by Tamarack Valley Energy in the Clearwater play. The deal was supported by the Alberta Indigenous Opportunities Corporation.

Since closing, the 12 First Nations and Métis communities have secured stable revenue streams that have proven more valuable than traditional impact benefit agreements (IBAs), long central to Indigenous engagement in the energy sector.

Photo courtesy Tamarack Valley Energy

“IBAs fluctuate with oil and gas prices,” Letendre says. “You can’t borrow against them. Banks won’t look at you.”

Equity ownership, by contrast, creates a tangible asset.

“With equity, you have ownership and predictable returns,” he says. “Banks recognize that.”

A ‘significant shift’ in energy development

Indigenous ownership of oil and gas projects has surged in the past five years, according to the Canada Energy Regulator (CER).

The CER reports that since 2021, Indigenous communities have acquired ownership interests in more than 5,000 kilometres of pipelines across the country. 

This is in addition to ownership stakes in four LNG terminals in B.C. and Manitoba at various stages of development. 

Many of the agreements are supported by government loan guarantee programs like the Alberta Indigenous Opportunities Corporation. 

“Overall, the growing role of Indigenous ownership in pipelines and LNG projects in Canada marks a significant shift in how major energy projects in the country are developed, financed, and managed,” the CER said.

Turning revenue into community infrastructure

Over the past two years, PTFN and the other communities have used Clearwater equity revenues to support education initiatives, emergency preparedness, wildfire evacuations and other community priorities without the restrictions that often come with government funding.

“There are no strings attached,” Letendre says. “We decide what our community needs most.”

One of the most visible examples is the Nation’s upgraded outdoor hockey rinks — $1.4-million structures with shells, lighting, boards and higher construction standards.

“These aren’t temporary fixes,” he says. “They’re built to last.”

Letendre says the energy partnership has strengthened and diversified PTFN’s economic base. 

While the community’s locally owned construction company creates much-needed jobs and builds capacity, expansion also brings added risk and expense.

“The equity deal is straight revenue. It did in one year what our construction revenue did in three – more than $500,000 a year – and if the company does well in production, it could be more,” he says.

A pattern repeating across Canada

Peerless Trout’s experience is not unique.

At Willow Lake Métis Nation, ownership of energy infrastructure has been transformative in similar ways. 

After investing in Suncor Energy’s Northern Courier Pipeline, the Nation was able to purchase 205 acres of land near Fort McMurray — its first modern homeland — now known as Sohkastwâwin, a Cree word meaning “resilience.”

Astisiy Limited Partnership, representing eight Indigenous communities, acquired Suncor’s 15 per cent interest in the Northern Courier Pipeline. Photo courtesy Alberta Indigenous Opportunities Corporation

Revenue from that deal has since been used to support housing, cultural programming and the purchase of a campground and RV park that Willow Lake plans to redevelop into an Indigenous tourism destination.

“For us, ownership means stability, being able to plan for the long term and invest in what matters most to each community,” says Justin Bourque, former CEO of the Nation who now leads a consulting firm specializing in negotiation and management of meaningful Indigenous-led industry partnerships. 

“Equity ownership doesn’t replace consultation requirements for energy companies. When you add the two together, it’s a deeper relationship that’s more well-rounded and more engaged.”

That same principle underpins Enbridge’s Project Rocket, a landmark partnership that saw 23 First Nations and Métis communities acquire an ownership stake in seven major pipeline assets in northern Alberta in 2022. 

One of the largest Indigenous equity transactions in North America, the deal has provided about $25 million over the last three years – steady, long-term revenue that communities are using for housing, education, elder supports and economic diversification.

Enbridge’s latest Indigenous partnership saw 38 First Nations acquire 12.5 per cent equity ownership of the company’s Westcoast natural gas pipeline system in British Columbia for approximately $736 million.

Squiala First Nation Chief David Jimmie said the deal will generate sustained economic benefits for the community from an asset that has operated within its traditional territories for more than 65 years. 

“People often ask what economic reconciliation for Indigenous Peoples looks like. This is it,” he said when the partnership was announced last May.

From ‘too good to be true’ to a new normal

Photo courtesy Peerless Trout First Nation/Facebook

For Peerless Trout First Nation, equity ownership has also unlocked the ability to think beyond immediate needs.

The Nation is now in the design phase of a fishing lodge and resort, a project aimed at diversifying the local economy and creating sustainable employment based on the fantastic fishing in the area’s lakes and rivers.

With equity in energy assets under its belt, the community is now able to leverage other financing for business ventures that were previously out of reach.

“At the beginning, it felt too good to be true, but it’s not,” Letendre says.

“Now we’re not just sitting back waiting for opportunities to arrive. We have the experience to be able to go out and approach industry on our own and pursue more partnerships,” he says.

“If we can do 10 more deals like this, it will benefit our people hundreds of times over for generations.”

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In the heart of the Canadian Shield, the Tenaris pipe mill in Sault Ste. Marie, Ont., has been running at record levels, thanks in large part to growing oil and gas production in Western Canada. 

In 2025, the factory reached its highest-ever output of seamless pipe in its 25-year history. 

And it’s on track to exceed that mark again in 2026, a milestone that reflects the company’s critical role in the steel town’s economy, as well as in Canada’s broader energy supply chain.

A worker checks steel pipe at the Tenaris manufacturing facility in Sault Ste. Marie, Ont. Photo courtesy Tenaris

Tenaris employs about 1,200 people nationwide, including roughly 800 in Sault Ste. Marie, manufacturing high-grade steel pipe that is shipped by rail to service centres in Alberta and British Columbia, where it supports oil and gas drilling and production.

“Our steel pipe manufacturing in the East allows oil and gas exploration to advance and flourish in the West,” says Jessica Tett, communications manager for Tenaris in Canada. 

“As the country strengthens its position as a global energy superpower, we are committed to powering that growth through our manufacturing, industrial expertise and support for Canada’s energy industry.”

As momentum builds around discussions of a new oil pipeline to Canada’s west coast, the country’s steel producers are sounding a clear, unified message: this isn’t just a project about energy transport — it’s a chance to strengthen Canada’s industrial core, support jobs and build supply chains that ensure national resilience.

Workers complete the “golden weld” signifying mechanical completion of the Trans Mountain Expansion project on April 11, 2024 in the Fraser Valley between Hope and Chilliwack, B.C. Photo courtesy Trans Mountain Corporation

Among other things, the recent energy agreement between Alberta and Canada to pursue a major new export pipeline to reach Asian markets commits both governments to develop Canadian steel and pipe production supply chains.

For steelmakers and manufacturers, the agreement signals a potential shift toward nation-building projects that prioritize Canadian materials, Canadian labour and Canadian expertise.

A cornerstone of Canada’s industrial economy

Tenaris’s experience reflects the broader importance of Canada’s steel industry, which is a cornerstone of the national economy and a critical supplier to energy, construction, transportation and manufacturing sectors. 

Tenaris employees work with pipe threading equipment at the company’s manufacturing facility in Sault Ste. Marie, Ont. Photo by Peter Power for the Canadian Energy Centre

Canada’s steel industry generates roughly $15 billion in annual output, directly employs about 23,000 people, and supports more than 100,000 additional jobs across related industries, according to the Canadian Steel Producers Association (CSPA).

Energy is one of the steel sector’s most important markets. 

The CSPA estimates oil and gas, wind towers and power generation together account for roughly 30 per cent of steel demand in Canada.

“We’re excited about it,” said François Desmarais, vice-president of trade and industry affairs at the CSPA, referring to the agreement and the prospect of a major new pipeline. 

“It’s a signal that we have an interest in the energy sector. It creates more certainty for our business.”

A worker looks on as crews build the Coastal GasLink pipeline in B.C. The project was completed in November 2023. Photo courtesy Coastal GasLink

Domestic supply in a volatile global market

Industry leaders say expanding Canadian energy infrastructure has become increasingly important as steel producers face mounting international trade pressures. 

The U.S. now charges a 50 per cent tariff on the first tonne of steel imported from any country, sweeping Canada into a broader move to deal with global steel oversupply.

“The net was too wide, and we got caught in it,” Desmarais said. 

“Many countries are trying to protect their national industries from surplus steel, particularly with China producing too much.”

Against that backdrop, building domestic demand through major energy projects could help offset lost export opportunities.

“We supply about 50 per cent of steel consumption in Canada,” Desmarais said. 

“There’s no reason why we can’t supply more.”

Steel pipe in storage for the Trans Mountain Expansion project in 2022. Photo courtesy Trans Mountain Corporation

Tenaris, which sells most of its Canadian-made production domestically, says it has less exposure to U.S. tariffs but strongly supports federal efforts to maintain a level playing field by countering unfairly traded imports.

“Made-in-Canada steel is critical to Canadian sovereignty in our energy supply chain,” Tett said.

Manufacturing ripple effects

The potential benefits of a west coast pipeline would extend well beyond steel mills. 

Canadian Manufacturers & Exporters (CME) says the energy agreement reflects a positive shift in how governments view Canada’s energy and industrial potential.

“Energy policy is manufacturing policy,” said Ryan Greer, CME’s senior vice-president of public affairs and national policy. 

“Canadian manufacturers will supply steel, fabricated metal, valves, pumps, electrical components, coatings, heavy equipment, control systems and more.”

An employee applies final adjustments on a new premium line at the Tenaris pipe manufacturing hub in Sault Ste. Marie, Ontario on October 31, 2022. Photo by Peter Power for Canadian Energy Centre

Greer said megaprojects have become increasingly important as Canadian manufacturers navigate tariff uncertainty and volatile trade relationships.

“While we hope Canada and the U.S. can get North American trade back on a more predictable trajectory, it has become clear that Canada must assertively try to generate jobs, growth and prosperity in ways that aren’t reliant on U.S. decision-making,” he said.

Becoming Canada’s own best customer

Steel producers say governments can maximize the economic benefits of a major pipeline by clearly identifying material needs early and prioritizing domestic procurement.

“Map out what the needs are or will be,” Desmarais said. “That allows companies to make the business case to retool if necessary.”

With billions already invested in Canadian facilities — including $255 million Tenaris has invested in Sault Ste. Marie, since 2020 — industry leaders say Canada is well-positioned to deliver.

The “Golden Weld” marked mechanical completion of the Trans Mountain Expansion project on April 11, 2024. Photo courtesy Trans Mountain Corporation

“Everybody is doing it — the U.S., Europe and others are looking out for their own industries,” Desmarais said. 

“Canada needs to do the same and become our own best customer.”

For companies like Tenaris, that approach would reinforce a truly national supply chain — one that starts in Ontario steel mills and ends at energy projects powering Canada’s economic future.

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