Adds Enbridge comments paragraphs 4-7
The Canadian government today approved Enbridge's C$7.9bn ($7.3bn) Northern Gateway pipeline to link landlocked Alberta crude supply with Asia-Pacific markets, finding that the contentious project is in the public interest.
Natural resources minister Greg Rickford said today the approval was subject to Enbridge showing Canada's National Energy Board (NEB) it could meet 209 conditions around safety, environmental protection and consultations with local communities, including First Nations.
"The proponent clearly has more work to do in order to fulfil the public commitment it has made to engage with Aboriginal groups and local communities along the route," Rickford said.
Enbridge chief executive Al Monaco echoed the minister in a tempered response to the approval, saying the end of the regulatory phase gave the company greater confidence to develop Gateway but did not signal a corporate decision to sanction it.
"We've got some more steps to go through before we get to a point where we can make a decision like that," Monaco said. "Obviously there's a lot of capital involved here to put to work to execute a project like this, and that takes careful consideration. At some point when we get satisfied, one way or the other, then we will make that call. That's not today."
The company was not tied to a late 2018 start-up date for the pipeline, Monaco said, adding its price-tag, to be released later this year, will be "significantly higher" than originally estimated on higher cost terrain on the route and engineering at the Kitimat terminal.
More than half of the conditions outlined by the NEB's joint panel had to be met before starting construction of the pipeline, a process which could take 12 to 15 months, Monaco said. Enbridge also needs a full buy-in from the British Columbia government, which has outlined financial and social demands on pipeline projects, and from 19 of 45 First Nations communities yet to sign on to the pipeline.
Northern Gateway would carry 525,000 b/d of bitumen from Alberta to the port of Kitimat, British Columbia (BC), and then to primarily Asian markets via tankers. A second twinned line would carry condensate back to Alberta.
Proponents of the pipeline call it a nation-builder, opening new export markets and reducing Canada's dependency on the US as its prime market for crude. Meanwhile, TransCanada's plan to build the 830,000 b/d Keystone XL pipeline linking Alberta with the US Gulf coast remains mired in legal and regulatory delays.
In Alberta, seat of Canada's energy industry, premier Dave Hancock said the Northern Gateway decision would create jobs and generate revenue for public services such as health care and education.
"Alberta will continue to support all safe and viable options to diversify and expand market access for Canada's resources," Hancock said.
Opponents argue the risk of a bitumen spill polluting land and waterways outweighs the economic benefits of the pipeline, and pledged to fight the proposal in court.
"Despite cabinet's approval, the pipeline will not be built," said Tim Gray, with activist group Environmental Defense. "These conditions cannot be met – an approval with conditions is as good as a no."
Opposition leaders condemned the Conservative party's approval, vowing to attempt to overturn the decision.
Enbridge first proposed the bitumen line in the early 2000s, but shelved the project because of a lack of backers until 2006. The company submitted a formal application to federal regulators in 2010, after which a review panel hosted consultations with affected parties along the proposed route and terminus.
The hearings were the most extensive in the NEB's history, with more than 4,000 people giving testimony. In 2013 the panel recommended approving the pipeline with 209 conditions.
dom/dcb/rjd
Send comments to feedback@argusmedia.com
If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.
Copyright © 2014 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.
