Alberta-Asia link alive again

Given up by some for dead, Enbridge hopes of sending Alberta oil sands production to Asian markets has got a second wind after being stalled more than two years ago.

An application for the 400,000 barrel per day Gateway pipeline from Alberta to the deepwater port at Kitimat on the northern British Columbia coast could be filed with the National Energy Board within 12 months, Enbridge Chief Executive Officer Pat Daniel said.

“This project is also very critical to maximizing the pricing of Canadian crude oil in the period post 2014, when once again we would have flooded the traditional markets for Canadian crude,” he said.

Daniel said Enbridge is now in talks with several major Canadian producers to line up an anchor shipper, but would not identify the candidates.

Suncor Chief Executive Officer Rick George said in April that opening access to markets in Asia and California would be a priority for his company in coming years.

Gateway came to a halt when PetroChina declined to extend an agreement with Enbridge to find 250,000 bpd of production to take the lead shipping role and possibly buy a 49 percent equity stake in the project. The giant state-run Chinese company blamed the Canadian government and producers for spurning the opportunity.

Daniel said a group of potential shippers is paying about C$100 million to prepare a submission to the NEB. In the process, they will earn the right to certain volumes on the line and to take an equity position in Gateway.

While aboriginal and local communities along the proposed pipeline right of way and environmentalists have signaled their opposition to Gateway, Daniel said Enbridge is pledged to ensure the project benefits residents.

California was originally eyed as an outlet for a minority share of the Gateway volumes, but the state’s growing opposition to supplies that generate high levels of greenhouse gas emissions has shifted the spotlight to Asian markets, including China, Korea, Japan and Taiwan.

Daniel would only say the main interest in taking shipments appears to be in Asia.

—Gary Park