Fri, February 22, 2008
Gateway pipeline back on track
UPDATED: 2008-02-22 01:25:47 MST
Enbridge will transport product from Alberta oilsands to B.C. coast
By MARKUS ERMISCH, SUN MEDIA
Pipeline company Enbridge Inc. has picked up construction pace on the Gateway Pipeline after slowing down the project in late 2006.
Construction is expected to finish between 2012 and 2014, said company spokeswoman Jennifer Varey, noting that construction costs will most likely come in above the original $4 billion.
Cost pressures primarily stem from higher labour prices and materials costs.
Varey said the company won't update the cost estimate until it is further along in the project.
The Gateway Project consists of two pipelines, running alongside for 1,150 km, which will connect the oilsands in Alberta's Strathcona County with the marine terminal in Kitimat on B.C.'s northwestern coast.
An export pipeline with an initial capacity of up to 525,000 barrels per day will transport petroleum from the oilsands to Kitimat, where the petroleum will be shipped to Asia.
A second pipeline with an initial daily capacity of 193,000 barrels per day will take condensate, a liquid by-product of natural gas, from the coast into Alberta.
In 2005, PetroChina signed a memorandum of understanding to co-operate with Enbridge on the project to ship extra-heavy crude across the Rockies to the coast.
"The pull from the other end of the Gateway initially was primarily from the Chinese, but in this initiative the Chinese are not participants, and the pull ranges from Japan down to Singapore -- so much broader Southeast Asian Interest," Enbridge CEO Patrick Daniel told an investors' conference in Whistler yesterday.
Varey declined to say if the MOU remains in effect.
Enbridge slowed construction in 2006 as the company focused on expanding its pipelines network in the U.S.
Enbridge announced this week that the National Energy Board has approved the US$2.2-billion Southern Lights pipeline project.
The project will ship chemicals from the U.S. Midwest to northern Alberta for oilsands development.
Enbridge shares closed at $40.70 in trading at the Toronto Stock Exchange yesterday, down $0.54.
