I have to admit, it was a bit of a sad weekend, as both my “home” teams, the Houston Texans and the Chicago Bears, lost their NFL playoff games. Here’s hoping they will do better next year!
Now, let’s dig into two pieces of energy news from the past week.
Shangyou Nie
Editor, Well Read
Canada and China to Collaborate in a “New Strategic Partnership”
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Canada and China mended fences in a major way after almost a decade of cold relations. This could bring significant changes to the energy world as Canada is a resource-rich country and China is the world’s largest energy consumer.
The latest:
Canada and China signed a series of agreements during Canadian Prime Minister Mark Carney’s visit to Beijing last week, including a framework for energy cooperation.
Carney’s visit is the first time a Canadian prime minister has visited China since Prime Minister Trudeau’s visit in 2017.
The two countries will establish a ministerial dialogue to explore opportunities in oil, gas, nuclear, and clean technology, according to Bloomberg.
Canada will allow up to 49,000 Chinese EVs to be imported, with a 6.1-percent tariff, in a “most favorite trading” partner status. This is a significant drop from the previous 100-percent tariff.
Canada will welcome Chinese investors in energy and auto businesses, “especially renewable energies,” to help create new jobs.
China will cut the tariff for canola from 80 percent to 15 percent, starting 1 March, in addition to suspending anti-discrimination duties on other farm products.
Canada and China will also cooperate on anti-drug trafficking, climate change efforts, and other areas.
Background:
Relations between Canada and China have been at a historical low since 2018, when Canada arrested Ms. Meng Wanzhou, CFO of Huawei Technologies, at the request of the U.S. government during Trump’s first term.
Canada and the United States, its biggest trading partner, have been having trade disagreements since Trump returned to the White House.
In October 2025, China imported 1.1 billion cubic meters of Canadian heavy crude—by far the highest level in recent years—after Canada expanded its Trans Mountain oil pipeline in May 2024.
Motivation: Chinese refineries, many fit to process heavy crude, are keen to import more Canadian crude after recent developments in Venezuela.
These NOC investments were highly criticized by investors and the Chinese government. Many believed they were paying too high a price and said the investments were linked to corrupt practices inside the NOCs.
What they’re saying:
Canada will be “forging new partnerships around the world to transform our economy from one that has been reliant on a single trade partner to one that is stronger and more resilient to global shocks,” said Carney ahead of his trip to Beijing.
China and Canada need to build “a new type of China-Canada strategic partnership” to “better benefit the peoples of the two countries,” and “world peace,” said China’s President Xi Jinping.
It was “very clear [the Chinese] would like more Canadian energy products,” said Tim Hodgson, Canada’s Natural Resources Minister, from Beijing.
“If we can use [Chinese] technology to help us get to net zero in a more affordable way, that’s good for Canada,” said Tim Hodgson, Canada’s Minister of Energy and Natural Resources, from Beijing.
What to watch:
Will Chinese NOCs start to invest in Canadian oil and gas assets/companies again?
Intriguingly, Shell (40 percent) and Mitsubishi (15 percent) are reportedly looking to divest some of their equity in LNG Canada, after the plant went into production in June 2025 and the Canadian government pledged to make LNG Canada Phase 2 a priority.
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Mitsubishi Buys Aethon for $7.5 billion to Extend its Gas Value Chain in the United States
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On 16 January, Japanese conglomerate Mitsubishi Corp. announced that it reached an agreement with Aethon Energy Management to acquire all equity interests in Aethon III, Aethon United, and related entities for $7.5 billion, including the assumption of debt. This is Mitsubishi’s first entry into the U.S. shale gas business. The gas can feed into Cameron LNG, where Mitsubishi already has an equity stake.
About the deal:
According to Mitsubishi, it reached an agreement with Aethon Energy Management to acquire its upstream and midstream assets in the Haynesville Shale for $5.2 billion and assume $2.3 billion in debt.
According to the WSJ, the deal is the biggest in Mitsubishi’s history. Bloomberg wrote that this deal is the biggest deal by a Japanese company within U.S. shale.
Mitsubishi will acquire the equity from Aethon investors, Ontario Teachers’ Pension Plan and RedBird Capital Partners.
With this transaction, Mitsubishi will acquire roughly 380,000 acres of shale gas, with 2.1 billion cubic feet per day of gas production capacity in the Haynesville Shale in Texas and Louisiana.
The gas production will be equivalent to about 15 million tonnes per annum of LNG.
Gas production could grow to 2.6 billion cubic feet per day, the equivalent of 18 million tonnes per annum of LNG.
Aethon has an option to buy back 25 percent of its upstream and midstream businesses.
The deal is subject to regulatory approvals and expected to close in Q2 2026 or the first quarter of Japan’s fiscal year.
What they are saying: “The U.S. gas market is the world’s largest in domestic demand, production, and exports, and further demand growth is expected, driven by rising power needs from AI/data centers,” Mitsubishi said.
About Mitsubishi:
Mitsubishi is an integrated trading and investment company.
Mitsubishi has eight business segments: Environmental Energy, Materials Solution, Mineral Resources, Urban Development and Infrastructure, Mobility, Food Industry, Smart-Life Creation, and Power Solution.
Mitsubishi has equity in two LNG projects in North America—16.6 percent in the Sempra-operated Cameron LNG in Louisiana and 15 percent in the Shell-operated LNG Canada.
In addition to its assets in the United States, Mitsubishi has upstream gas assets in six other countries: Australia, Brunei, Canada, Indonesia, Malaysia, and Russia.
About Aethon:
Dallas-headquartered Aethon is a private company, founded by CEO Albert Huddleston 35 years ago.
According to Aethon, it is one of the largest private U.S. gas producers and suppliers of LNG, with 400,000 net acres and 2.6 billion cubic feet of gas per day (gross).
Aethon’s primary business is in the Haynesville Shale in Texas and Louisiana, but it also has oil and gas assets in Wyoming’s Wind River Basin.
It also has 1,700 miles of pipeline infrastructure with a throughput capacity of 2.9 billion cubic feet per day.
Aethon said it formed a “Global Strategic Alliance” with Mitsubishi for future commercial opportunities across energy transition and next-generation infrastructure projects globally on a non-bidding and non-exclusive basis.
The big picture:
Japan pledged to invest $550 billion in U.S. industries, including energy, in a U.S.-Japan trade agreement.
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