PetroChina Faces Legal Obstacles in Attempt to Buy Alberta’s Grand Rapids Pipeline

A gas station belonging to the state-owned oil company PetroChina in Beijing, on March 21, 2016. Kim Kyung-Hoon/Reuters

A bid by the Canadian arm of PetroChina Ltd. to take full ownership of Alberta’s Grand Rapids Pipeline is facing various legal and regulatory obstacles.

The Chinese-owned corporation currently owns about half of the 460-kilometre pipeline that transports oil from the oil sands in and around Fort McMurray, Alta., to the Edmonton area, and is seeking to buy the remaining stake from Calgary-based South Bow Corporation.

PetroChina attempted to buy out South Bow’s share in November 2025 via a purchase option in their shared agreement that came with a 30-day deadline. This did not allow time for legally required government approvals under the Competition Act and Investment Canada Act to go through.

On Nov. 24, South Bow declined to extend the 30-day time period or wait further for the regulatory approvals to go through, meaning the deal could not be finalized. PetroChina triggered a dispute resolution process since it could not get the required approvals by Dec. 24, 2025, and also sought an injunction from the court that would stop the option from expiring as arbitration continued.

In a decision released Jan. 7 by Justice Douglas Mah of the Court of King’s Bench of Alberta, he wrote that both approval requirements from the government would likely take several months to obtain, and refused to grant an injunction, concluding that any alleged harm experienced by PetroChina could be addressed via arbitration.

Mah said that PetroChina had not demonstrated why it would suffer irreparable harm if the option expired and said the option could later be restored by the arbitration panel if it agrees with PetroChina.

PetroChina is a state-owned subsidiary of the Chinese regime’s China National Petroleum Corporation and had an estimated trailing 12-month annual revenue of $543 billion in 2025. PetroChina engages in oil and gas exploration, production, and sales around the world, along with operating a number of pipelines, including some of the biggest natural gas pipelines in China and the Eastern Siberia–China Pipeline stretching 4,000 kilometres from eastern Siberia to Daqing in northeast China.

Concerns over Chinese state-owned enterprises have been raised by various Western nations, officials, and private sector entities, who cite national security risks, unfair competition, and data security issues, noting Chinese state-backed corporations are mandated by national security laws to hand data over to Beijing when required for intelligence work.

PetroChina has also faced past controversies including corruption scandals with executives such as former chairman Wang Yilin jailed for bribery, accusations of disrupting oil markets and tax evasion, and U.S. fines for misreporting exports. Other issues involve environmental concerns linked to projects in Myanmar, and a fallout with auditor PwC after the Evergrande scandal.

PetroChina partnered with TransCanada Corporation, now TC Energy Corp., in 2012 to construct the Grand Rapids Pipeline, which has been operational since 2017, and cost an estimated $3 billion to build. TC Energy Corp. shifted its oil pipeline assets into South Bow in late 2024. The current value of the pipeline was not listed in court documents.

PetroChina was previously a committed shipper on the Trans Mountain Pipeline before handing its contracts to a different party in October 2024. A committed shipper signs a long-term contract to reserve capacity on a pipeline and pay for that capacity even if unused.

In addition to its partial ownership of the Grand Rapids Pipeline and shipping activity on the Trans Mountain Pipeline, PetroChina has a 15 percent stake in LNG Canada’s large-scale liquefied natural gas (LNG) facility at Kitimat, B.C. The facility, which turns natural gas from western Canada into LNG to export to Asia, began shipping in June 2025. PetroChina receives a share of the facility’s profits and LNG output, with an expansion phase to the terminal currently being considered by Ottawa’s Major Projects Office slated to double production and subsequently make it the second-largest LNG export terminal in the world.

The Canadian Press contributed to this report.