The National Post is Canada’s second largest national paper.
CALGARY – With the future of the proposed $5.5-billion Northern Gateway oil sands pipeline proposed by Enbridge Inc. looking bleak because of hardening opposition, competitor Kinder Morgan Energy Partners LP surged from behind Thursday with a plan for a better-looking replacement – a $5-billion expansion of its Trans Mountain pipeline from Edmonton to Vancouver.
The expansion would increase the capacity of the 62-year-old line – the only one moving oil from Alberta to the West Coast and Asia – to 850,000 barrels a day, from today’s 300,000.
The expansion is bigger than under previous plans, which called for a $3.8billion, 600,000-bpd project, and would reduce the need for Northern Gateway, with a capacity of 550,000 bpd, at least for now. If approved by regulators, the expanded system would be operational by 2017, years before Northern Gateway’s planned startup.
The Kinder Morgan plan is backed by 20-year commitments from existing and new shippers after a so-called open season. They suggest that producers, refiners and offshore interests are backing a new horse in the race to diversify Canada’s oil market in Asia.
“The [commitments] imply confidence in the oil-producing capabilities of Alberta, they imply a vote of confidence and the importance of accessing more global markets and providing more outlets for Canadian crude, and it’s a vote of confidence in our operation and in our prospects for successful expansion,” Ian Anderson, president of Kinder Morgan Canada, the Canadian unit of the Houston-based energy infrastructure giant, said in an interview.
“The task at hand now is to prove to all Canadians, including producers as well as British Columbians, that we can do this in a safe and efficient manner,” Mr. Anderson said.
While Kinder Morgan won’t be spared the wrath of B.C. environmental organizations and First Nations that are worried about oil spills, oil tanker traffic, oil sands growth and climate change, its project has better odds of moving forward because it deals with many of Northern Gateway’s irritants.
The incremental oil would move on an expanded pipeline on an existing right of way that has been operating safely since oil was discovered in Alberta, while Northern Gateway is new and would cut across British Columbia’s north through largely undeveloped areas.
For the rest of this column, please go to the National Post website: http://www.financialpost.com/todays-paper/Head+start+race+China/6451580/story.html