Enbridge keeps Northern Gateway project alive

GARY PARK

For Petroleum News

Enbridge is defying the odds by clinging to its proposed Northern Gateway pipeline to export crude bitumen from Alberta to Asia.

The Calgary-based company said it and contracted shippers have asked the National Energy Board for a three-year extension to the end of 2019 on its construction permit.

It said the new deadline would give it a chance to achieve “legal and regulatory certainty and to continue important discussions with First Nations and Metis communities” on benefits and access agreements.

Enbridge conceded it should “have done a better job” of building relationships and developing “true” partnerships with indigenous communities, especially those on the British Columbia coast. The company said it and Northern Gateway partners now favor reducing their ownership stake in the C$5.9 billion venture to raise the aboriginal share to 33 percent from 10 percent.

That would double First Nations and Metis benefits to C$2 billion from C$1 billion. The consortium has also proposed a “joint governance structure” to incorporate indigenous and industry voices.

“Northern Gateway has changed,” John Carruthers, president of the pipeline operator, said in a statement.

“We are making progress and remain open to further changes.”

The project was endorsed by the previous Canadian government two years ago, when 209 conditions were attached to final approvals for the 720-mile twin pipeline system to export 525,000 barrels per day of unrefined bitumen and import 193,000 bpd of condensate.

Many First Nations and environmentalists have mounted even stiffer opposition to the project, including launching a challenge in the Federal Court of Appeal, while the British Columbia Supreme Court has ruled the province’s environmental assessment agency must issue its own certificate and is at liberty to impose its own conditions.

Enbridge said the rejection by the Obama administration of TransCanada’s Keystone XL proposal and the lifting by the United States of its oil export ban have stepped up the urgent need for Canada to gain access to crude markets beyond North America, noting it is now uncertain have much “additional capacity to the United States will be afforded to Canadian oil producers.”