Pipeline to B.C. back on track
Asian demand for Alberta crude makes 1,300-km route to B.C. port feasible, Enbridge president says
Gordon Jaremko, The Edmonton Journal
Published: Saturday, December 29 2007
Courses are being charted for supertankers to fetch Alberta oil for Asia from a new British Columbia terminal planned for Kitimat.
Engineers are designing tunnels to put a new pipeline beneath the mountains between Edmonton and the Pacific Ocean without scarring alpine scenery or wildlife habitat.
A mobile training camp is touring aboriginal settlements along the proposed 1,300-kilometre route to recruit candidates for project jobs as welders, electricians, plumbers, pipefitters, steamfitters and millwrights.
"We have had strong general support for the concept of broadening out markets for Alberta crude," Enbridge Inc. president Pat Daniel said in an interview.
A year after suspending regulatory review of its Gateway Pipeline proposal to focus on higher priority construction of links to the United States, Enbridge is stepping up preparations for laying the new ocean export route.
"We still feel the line will be built," Daniel said. "It's not just for China," he added.
As consumption in developing countries grows, pushing up prices for limited conventional oil towards $100 a barrel, Daniel said interest in the oilsands is on the rise among overseas refiners.
A partnership with PetroChina, to sell Gateway delivery contracts, is lining up a new market for Alberta that spans Southeast Asia, including Japan, Korea and Singapore, he said. California, a Canada-sized oil market currently not served by Alberta export pipelines, is also a sales target, Daniel added.
Oilsands developers have a strong interest in tapping into emerging overseas destinations for growing output, the Enbridge president said.
Adding Asian outlets would inject a favourable element of "pricing tension" into mainstay export markets in the U.S., Daniel said.
American refineries would compete for Alberta supplies by paying full international prices and ending a tradition of commanding discounts in exchange for taking production that has no buyers outside North America, he predicted.
By setting a flexible target date of "the 2012 to 2014 time frame" for completing Gateway, Daniel said Enbridge is matching projected acceleration of oilsands production to about three million barrels per day or nearly triple current average volumes.
The new pipeline is being designed to ship all varieties of Alberta output, from asphalt-like bitumen with coarse impurities to premium "upgraded" synthetic oil ready for refining into fuels up to the latest anti-pollution standards for sulphur-free gas and diesel.
Current Enbridge work on Gateway is preparing the project for federal engineering, safety and environmental reviews expected to be long and intense.
The Alberta firm hired Danish marine traffic specialist Force Technology to chart detailed courses in B.C. coastal waters for giant ships known as VLCCs, or very large crude carriers.
With lengths of about 340 metres and 60 metres beams, and deep hulls drawing 23 metres of water when loaded with 2.3-million-barrel cargoes, the tankers are built on the proportions of a jumbo West Edmonton Mall.
But B.C. tugboat masters and coastal navigation pilots, using Danish ship simulators akin to mock cockpits used to train jet airliner crews, demonstrated VLCCs can sail safely along every kilometre of an identified, detailed route past B.C.'s rugged northwest coast up to the proposed Kitimat oil terminal, Enbridge reported.
Engineering advances are also harnessed for laying the most environmentally sensitive legs of the pipeline route.
Gateway plans include two tunnels through mountains that will set new standards for an industry that traditionally lays pipe at shallow depths by digging trenches in all terrain.
"We want to do whatever we can to minimize environmental impact," Daniel said.
Except for short river crossings, Enbridge has yet to use tunnels in its 13,500-kilometre oil pipeline network between Norman Wells in the Northwest Territories and Chicago, but is confident the new method can work.
The proposed Gateway route runs northwest from Edmonton to Grande Prairie along Highway 43, enters the Rocky Mountains in B.C. wilderness south of Tumbler Ridge, then crosses mostly Crown land west to Kitimat.
More than five years of courting aboriginal support continues in frequent contacts with B.C. native communities and an employment preparation program. A mobile school dubbed Trade Routes is touring up to 20 northern B.C. communities, seeking candidates for 18-month training programs in skilled trades that will be required by the pipeline project.
Construction is expected to take nearly three years and employ more than 5,000 workers.
The last estimate for building the 400,000-barrels-daily pipeline, $4 billion, was up 60 per cent from initial estimates but was made in 2005 before steep cost increases hit oil and gas industry developments.
gjaremko@thejournal.canwest.com
http://www.canada.com/edmontonjournal/news/business/story.html?id=ec1c41...
