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Kinder Morgan comes out swinging Company challenging Enbridge in Alberta-northern British Columbia pipeline race; both negotiating with oil sands shippers Gary Park Petroleum News Canadian Contributing Writer
Finder Morgan is wasting no time flexing its muscles as it bids to become the heavyweight contender in Canada’s oil sands pipeline sector.
Having concluded its takeover of Vancouver-based Terasen Pipelines, Texas-based Kinder Morgan’s freshly minted Canadian President Ian Anderson is challenging Enbridge, the widely-perceived front-runner in the race to build pipeline connections between Alberta and the northern British Columbia coast.
In a series of December interviews, Anderson, formerly chief financial officer at Terasen, laid out his company’s goals in unambiguous fashion.
He told the Globe and Mail that Kinder Morgan “has had as many direct shipper and customers discussions” as Enbridge as the two companies lock horns over their proposals to build pipelines across northern British Columbia.
Anderson said Kinder Morgan is hearing from Canadian Natural Resources and other oil sands producers that negotiations on shipping commitments are still in the early stages. Enbridge earlier declared ‘winner’ That was a less-than-subtle dig at those who wrote Terasen out of the contest earlier this year when PetroChina reached a deal with Enbridge to provide half of the volumes for the proposed 400,000 barrel-per-day Gateway project and is now in the midst of an open season to line up shippers.
Merrill Lynch was quick to declare Enbridge the “winner” when the deal with PetroChina was made public.
Enbridge has said that, provided it received sufficient backing, it plans to file an application with the National Energy Board by mid-2006.
Anderson said Kinder Morgan will weigh the industry’s desire for a 500,000 bpd pipeline over the same period. NEB approved Kinder Morgan Trans Mountain expansion On a smaller scale, Kinder Morgan received NEB approval for a C$230 million expansion of its Trans Mountain system from Edmonton, Alberta, to Burnaby, British Columbia, to 260,000 bpd of heavy crude capacity from 225,000 bpd, targeting early 2007 for completion.
An environmental report has also been filed prior to a full regulatory application in February 2006 for a 100-mile twinning of Trans Mountain to further boost capacity to 300,000 bpd by the end of 2008.
The company said these milestones “are the direct result of the strong support received from shippers and reinforce the importance of the (Canadian business unit) to Kinder Morgan’s future growth plans.”
It said the twinning will bolster plans for a full twinning of Trans Mountain and the construction of a northern pipeline to the deepwater port at Kitimat.
“We are committed to serve all customer requirements to move oil to markets, whether they are in Canada, the United States, Asia or elsewhere,” Kinder Morgan said in an echo of Enbridge’s plans.
In addition, the two companies are tussling over parallel hopes to import natural gas liquids through the Kitimat port to facilitate the thinning of heavy bitumen blends for pipeline shipment.
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