The much anticipated Kitimat Gateway pipeline to be built by Enbridge Inc. is getting pushed back on the corporate agenda, as the company has decided to concentrate on its Alberta Clipper project.
That project is designed to move Alberta oil to the Midwest US, and has become a higher priority due to expanded refining capacity in that part of the States. The push to have that pipeline up and running by late 2009 means that the Kitimat pipeline project will slow down its pace of development, aiming for a completion period of 2012 to 2014.
The Kitimat project featured a dual pipeline system that would run oil from Edmonton to Kitimat in one pipeline and condensate from offshore back to Edmonton in the other. There is still a possibility that the condensate pipeline will be fast tracked ahead of the oil one, with a decision on that possibility expected in the next few months.
The Daily News grabbed material from its wire services, to review the developments on Monday afternoon.
KITIMAT PIPELINE MAY BE DELAYED, ENBRIDGE
Firm expects to focus on inland pipeline to the U. S.
Daily News Wire Services
Monday, November 6, 2006
Pages one and three
PRINCE GEORGE—Enbridge has decided to give priority to increasing oil pipeline capacity inland to the U. S., which will delay its $4 billion Gateway pipeline through northern B. C.
The company announced Friday it will be focusing on its Alberta Clipper project to have it operating by late 2009, a response to recent announcements by its customers- to expand oil refining capacity in the U. S. Midwest.
It means the Gateway project will be pushed back two to four years, with its completion estimated now at 2012 to 2014.
“We saw a need for either an Alberta Clipper or Gateway project in 2009 and 2010 time period.” Enbridge president and CEO Pat Daniel told analysts on a conference call to discuss the company’s $92.3 - million third-quarter profit.
“At this point, it would appear that Alberta Clipper will precede Gateway, unless there’s a shift in current market sentiment,” he said.
Enbridge has spent about $80 million on developing the Gateway project, which runs from the Edmonton area to Kitimat through Northern B. C. passing just north of Prince George.
The twin pipeline – carrying oil and condensate, an oil thinner p is meant to provide increased capacity for the Alberta oilsands, where production is expected to double by the end of the decade.
Daniel said the company will continue developing the Gateway project, but “not at the same accelerated pace as the Alberta Clipper project.”
The Gateway project was eyed to open up new markets in Asia, particularly China, and the U. S, west coast.
Asked by an analyst, whether the company would consider proceeding with the condensate line first, Daniel said the idea is still to build the two lines at the same time as its more cost effective.
But Daniel said the company would probably have a better idea in the next few months, whether it would develop the condensate line more rapidly that the oil line.
Another company, Pembina Corp., also has proposed building a $1 billion condensate line between Summit Lake, just north of Prince George, and Kitimat. That line would hook up with Pembina’s existing pipeline structure at Summit Lake.
The decision to focus on the Alberta Clipper oil pipeline, and delay the Gateway project, comes a week after the Carrier Sekani Tribal Council filed an application in Federal Court challenging Ottawa’s decision to send Enbridge’s proposed $4 billion pipeline to a joint review panel.
The tribal council - the largest First Nations group in B. C.’s northern interior – has asked the court to overturn federal Environment Minister Rona Ambrose’s decision because they say they were not consulted.
Ambrose announced Sept. 29 the pipeline would be jointly reviewed by a panel of the National Energy Board and the Canadian Environmental Assessment Agency.
Asked if the decision to delay the Gateway project had anything to do with the court action, Enbridge spokesman Glenn Herchak said no.
“Our decision to re-prioritize our efforts to the U. S is really based on customer needs and market priorities,” he said.
Herchak stressed that Enbridge’s efforts to secure anchor shipments for the Gateway pipeline will continue.
Carrier-Sekani Tribal Council vice-chief Catherine Lessard said it is a good time for a delay.
“We felt the company was rushing the project, and perhaps people in the market place felt the same way too, that might have had a little bit of an effect on it,” said Lessard.
The tribal council wants more time to study the impacts of the pipeline, as well as consultation.
“We hope the government will used this delay as an opportunity to work together with us to develop a First Nations review process that will parallel the federal review process<’ said Lessard.
(Prince George Citizen)
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