By Phaedra Friend Troy
Enbridge Inc. (NYSE:ENB) (TSX:ENB) has found strong commercial support for its proposed $5.5 billion 1,1177-kilometer twin pipeline development project and marine terminal in Canada.
Filing with the Canadian regulator National Energy Board, Enbridge's Northern Gateway Pipelines has signed commercial agreements that fully subscribe for the long-term service and capacity of both the crude oil export pipeline and condensate import pipeline. The Canadian producers and Asian markets have agreed on commercial terms relating to the long-term use of the project.
The Northern Gateway project will build two pipelines from Edmonton, Alberta to a new marine terminal in Kitimat, British Columbia, on Canada's West Coast. Currently under regulatory review, the proposed Northern Gateway project would transport 525,000 barrels a day of oil for export and import 193,000 barrels per day of condensate.
"Commercial support for the project from both Canadian oil producers and Asian markets reinforces the international importance of the project to Canada - facilitating access to world markets and international pricing for Canada's most valuable non-renewable resource," said Janet Holder, Enbridge's executive vice president, Western Access.
Considering this a major step forward for the midstream project, Enbridge believes this commercial support demonstrates the need for Northern Gateway pipelines and marine terminal.
"Northern Gateway will link two of Canada's most important competitive strengths: our tremendous petroleum reserves and our Pacific advantage - safe deepwater ports that are close to the growing markets of the Pacific Rim," she added. "The project has the potential to move Canada into receiving premium prices in the global energy marketplace, rather than the landlocked, one customer price-taker it is today."
Another major pipeline project, TransCanada (NYSE:TRP) (TSX:TRP) is proposing to build the Keystone XL Pipeline from Canada to the Texas Gulf Coast. This project has seen its fair share of regulatory hurdles. While there is some backlash to Canadian oil sands in the US, Asian markets are eager to import the oil, as seen with the Northern Gateway project.
Enbridge's $5.5B Northern Gateway pipeline project gets commercial support in Canada, Asia
By Phaedra Friend Troy