CERAWEEK-Canada discusses Keystone XL revival with Trump administration officials

By Amanda Stephenson

HOUSTON, March 24 (Reuters) - Canadian officials spoke to Trump administration representatives about a proposed revival of part of the cancelled Keystone XL oil pipeline in a meeting in Houston this week, Canada's Natural Resources Minister Tim Hodgson said Tuesday.

The project proposed by Canadian pipeline company South Bow and its U.S. partner Bridger Pipeline - which could increase Canada's crude exports to the U.S. by more than 12% if it goes ahead - was one of the topics Hodgson said he and Canada's Ambassador to the U.S., Mark Wiseman, discussed with U.S. Energy Secretary Chris Wright and U.S. Secretary of the Interior Doug Burgum.

Canada is framing the prospect of a new cross-border oil pipeline as a way it can help the U.S. achieve energy security even as the war in Iran disrupts supplies and raises prices for consumers, Hodgson said in an interview at the CERAWeek by S&P Global conference.

"Yes, (the U.S.) are the largest producer of oil in the world, they're at 12-13 million barrels per day. But they consume 20," Hodgson said. "And they understand that Canada provides about 63% of that difference."

President Donald Trump's tariff wars and annexation threats have strained relations with Canada. But Trump has also repeatedly called for lower oil prices and many U.S. refiners depend on the roughly 4.4 million bpd of exports that Canada sends south of the border.

Hodgson declined to say whether the Trump administration has indicated that it will support the South Bow/Bridger project or make any attempt to fast-track the U.S. regulatory approvals that are required.

"I would say they (Wright and Burgum) are thoughtfully looking at all of the options to make sure the world has the oil it needs to function," Hodgson said.

The White House did not immediately respond to a Reuters request for comment.

Hodgson said he also made it clear during the meeting that Canada is aggressively working to expand its oil exports to non-U.S. markets by completing a planned 300,000 bpd expansion of the Trans Mountain pipeline that runs from Alberta to the Pacific Coast.

Prime Minister Mark Carney has been traveling the globe courting new customers for Canadian energy in an effort to reduce the country's reliance on the U.S. market.

"What we need to do, as the Prime Minister has said, is not sell less to the United States. We need to sell more to other people," Hodgson said.