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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2006

Vol. 11, No. 20 Week of May 14, 2006

1st Nations toss legal wrench at Gateway

Aboriginal opposition is mounting against a proposed Enbridge oil sands pipeline from Edmonton and a deepwater port at Kitimat on the northern British Columbia coast, but the company is confident the challenge will not derail efforts to open up new markets in Asia and California.

The Carrier Sekani Tribal Council, representing seven First Nations whose land covers about one-third of the planned 720-mile route, alleges it has not been properly consulted and is threatening legal action before the Federal Court of Canada.

The tribal council has been pressing for greater involvement in a joint review process being conducted by Canada’s National Energy Board.

The NEB has argued that there will be “ample opportunity” for any affected party to register its concerns before the joint review panel.

The Council of the Haida Nation, representing the Queen Charlotte Islands off the B.C. coast, has also told the NEB that the pipeline should not be approved before the impact of oil tanker traffic in its region is fully examined.

Enbridge Chief Executive Officer Pat Daniel said the dispute is a matter for the Canadian government not Enbridge to handle.

“We don’t expect any delays associated with it,” he said. “Our discussions (with the Carrier Sekani) have been very favorable.”

Although fully anticipating challenges, Daniel said he is confident they will be solved “in a timely way.” The clock is running on Enbridge’s hopes of filing a regulatory application by mid-2006. The initial plans call for a C$4 billion pipeline to carry 400,000 barrels per day (with PetroChina viewed as a potential candidate for 200,000 bpd, 100,000 bpd going to other Asian markets and 100,000 bpd to California).

An open season that ended in December surpassed the 400,000 bpd threshold, prompting Enbridge to increase the planned diameter to 36 inches from 30 inches and contemplate additional pumping stations that could eventually raise Gateway’s capacity to 800,000-1 million bpd.

The company also plans a parallel pipeline to import condensate to dilute oil sands bitumen. A non-binding open season has pointed to a possible demand for a 200,000 bpd system.

—Gary Park






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