|
Enbridge ready to capitalize on Alaska, Mackenzie gas
Gary Park, Canadian correspondent
Enbridge Inc. is in full flight as it spreads its wings across North America, with the Arctic firmly fixed in its sights.
Having signaled its ambitions a year ago by moving its U.S. stock listing to the New York Stock Exchange from the Nasdaq, the Calgary-based pipeline is now walking the walk on its way to quadrupling in size from mid-2001 to mid-2006.
Big by Canadian standards — it operates the world’s longest crude oil and liquids pipeline — Enbridge has declared its ambition to join the ranks of the top 10 in North America.
Its climb to a higher rung, with a bigger footprint in the United States as a vital component, along with a rapid move into the natural gas sector and international acquisitions, has coincided with the financial and legal woes that have beset its U.S. peers, such as Williams Cos., El Paso Corp. and Duke Energy Corp.
With those giants forced to jettison assets before they were swamped with debt, Enbridge has become active in the salvage business.
Will own more of Alliance On Oct. 11 it put the final touches to a complex series of deals that will raise its stake in the Alliance natural gas pipeline from northeastern British Columbia to Chicago to 38.2 percent, putting it on the same footing as Fort Chicago Energy Partners L.P., a Calgary-based energy trust. The remaining stake is held by Duke.
The C$4.7 billion pipeline, opened less than two years ago, covers 1,800 miles and can deliver 1.55 billion cubic feet per day.
More importantly, Alliance is positioned to capitalize on gas from either Alaska or the Mackenzie Delta, sitting halfway between Prudhoe Bay and Chicago.
And Enbridge President and Chief Executive Officer Patrick Daniel has made no secret of his desire to grab a piece of any pipeline action from the Arctic. He said last year that Alliance is considering an expansion to pick up gas from an Alaska Highway pipeline, which could mean doubling the capacity of the system.
“What Alliance brings is right of way ... and recent construction experience that would be very valuable,” he said.
Only company with Far North experience Enbridge also remains the only Canadian pipeline with actual Far North regulatory, design, construction and operating experience. For three years it has been a one-third owner of the Inuvik Gas Project, a 30-mile link delivering gas to commercial and residential customers in Inuvik and for 17 years it has shipped light crude from Norman Wells, in the Northwest Territories, to Alberta, on the first pipeline to be built through Canada’s permafrost. It is counting on that experience to gain at least an equal stake with TransCanada PipeLines Ltd., its bigger Canadian rival, in any pipeline from the Mackenzie Delta.
In the latest Alliance ownership shuffle, Enbridge said it had a deal to acquire El Paso’s 14.4 percent interest for C$270 million, coming on the heels of last month’s agreement to buy Williams’ 15 percent interest for US$173 million.
Under earlier arrangements with Fort Chicago, Enbridge is selling parts of its Williams and El Paso purchases to give both companies equal stakes in Alliance.
“This second increase in our ownership of Alliance further reinforces our North American natural gas transmission presence and strategy,” said Daniel, in a statement Oct. 11. The deal will also see Enbridge pick up El Paso’s interest in the $550 million Aux Sable gas liquids plant in Chicago at the end of the Alliance line.
| 