Alaska pipeline ruling at hand: Enbridge CEO
Canadian rivals in running to construct domestic section of natural gas artery
By DAVE EBNER
Tuesday, June 14, 2005 Page B4
theglobeandmail.com
CALGARY -- A highly anticipated decision by Ottawa on the building of the massive Alaska natural gas pipeline through Canada could be made as early as this week, the head of Enbridge Inc. said yesterday.
"We anticipate we'll know pretty soon," said Patrick Daniel, president and chief executive officer of Enbridge, adding that he is hoping to hear "at least a preliminary indication out of the federal government of where they stand" this week or next.
The issue is what regulatory framework will be used to assess the building of the domestic leg of the proposed $20-billion (U.S.) gas pipeline from northern Alaska through to Chicago. TransCanada Corp. insists it controls the Canadian rights, granted under the Northern Pipeline Act, legislation passed by Ottawa in 1978. Enbridge wants an open process and would like to submit its own application to the National Energy Board.
That option is the one the developers of the Alaskan gas -- BP PLC, Exxon Mobil Corp. and ConocoPhillips Co. -- would like to use as well.
Mr. Daniel, with other Canadian pipeline executives, spoke during a discussion at the 17th annual oil and gas symposium in Calgary, which started yesterday and is put on by the Canadian Association of Petroleum Producers. After the discussion, Mr. Daniel said in an interview that he based his prediction of an impending decision on "rumours and rumblings." While he said there have been such rumblings through all of this year, he said he is giving that chattering more credence this time.
Hal Kvisle, TransCanada's president and CEO, said in an interview that speculation on the regulatory issue has been "on and off" for many months. "I have no particular expectation for this week -- or any week," Mr. Kvisle said.
Mr. Kvisle reiterated his company's argument that its rights to build the line remain intact, despite Enbridge's suggestion the Northern Pipeline Act is somehow outdated. Further, Mr. Kvisle pointed to an endorsement of the Act and TransCanada's rights in a November, 2003, letter from then-prime minister Jean Chrétien to TransCanada.
An important consideration is the type of pipeline to be built, Mr. Kvisle said. Unlike other places in the world, most of the North America's pipeline network is controlled by pipeline companies, which have an interest in letting many producers gain access to the infrastructure. The Alaskan producers are interested in building a line on their own, which could mean that "Alaska gas steams right through" Alberta, Mr. Kvisle said.
That's the so-called "bullet line." BP has said it has more recent pipeline building experience than TransCanada and Enbridge put together and doesn't need either to get the project finished.
TransCanada has proposed a line that would see the gas pause in Alberta for some processing.
Mr. Daniel, during the discussion, said Enbridge is trying to persuade the producers to let his firm help build and operate the line but emphasized it is the right of the producers to go it on their own since they took the risk to find and develop the gas.
Despite the debate around the Alaskan line, it remains more a concept than a near reality. The general feeling is that the line won't be in business before 2014 or 2015. The State of Alaska missed a deadline it had set for itself this spring, when it wanted to complete arrangements with producers on questions such as royalty payments. The issue now won't be put before the state legislature before the fall. |
