Kinder Morgan determined Canadian player

Gary Park

Kinder Morgan is not ready to concede anything in its battle of the pipeline giants with Enbridge and TransCanada to build transportation systems from the Alberta oil sands.

The Houston-based company is taking the next step towards parlaying its recently concluded takeover of Terasen into a major presence in Canada.

It applied to the National Energy Board for permission to build a C$600 million expansion of its pipeline link from Edmonton to the Greater Vancouver area, hiking capacity to 300,000 barrels per day from 225,000 bpd by late 2008.

In case anyone was missing the point, Kinder Morgan spokesmen say that’s part of the company’s ambition to spend C$4.3 billion on a West Coast growth strategy.

Company President Park Shaper told Canadian Press that Kinder Morgan is confident it has the edge on Enbridge in the race to deliver output from the oil sands to tanker ports on the British Columbia coast.

PetroChina poised to take space

It has PetroChina poised to take half of those volumes and has indicated non-binding commitments are in place from other customers, but final deals are not expected until the second quarter of this year.

For all of that appearance of progress, Shaper believes Kinder Morgan’s hopes of a similar pipeline to a deepwater port in northern British Columbia may even have the edge on Gateway.

He bases that on the fact that Kinder Morgan inherited from Terasen an existing pipeline from Edmonton to the Alberta-British Columbia border, improving its chances of negotiating sufficient binding commitments to compete with Enbridge.

He noted that shippers are happy to see pipeline companies invest in pipeline projects, leaving the shippers with a “free option on whether they ultimately want to commit or not.”

Because of the proliferation of oil sands-related prospects, Shaper said there will be “a lot of opportunities that other players take advantage of, but we expect that we’ll get our fair share of those opportunities.”