Enbridge still faces hurdles before Northern Gateway oil begins to flow


Enbridge (ENB) gained approval for its Northern Gateway pipeline, but now the real work begins, since it first must nail down oil shipping contracts that meet the 200-plus conditions attached to the project.

ENB needs firm transportation contracts covering at least 60% of the pipeline’s capacity prior to starting construction, and some analysts say the many competing export projects and the sharp growth of oil shipments by rail could make shoring up commercial support for the pipeline difficult, and even delay construction into next decade.

If built, Northern Gateway would serve as an important link between the Alberta oil sands deposits and energy-thirsty Asian markets, but If TransCanada’s (TRP) Keystone XL and Energy East projects are approved, “Gateway gets shelved for a very, very long time, because [ENB] won’t be able to fill it," says one industry analyst.

Suncor (SU), Cenovus (CVE), Cnooc (CEO), Total (TOT) and others have signed so-called precedent agreements to ship oil on the pipeline, but legal experts say those agreements aren’t binding, giving producers wiggle room to choose alternatives.

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Comments (6)
  • PeakOiler
    , contributor
    Comments (299) | Send Message
     
    Ha, the main hurdles go way beyond the couple of minor issues you mention. They include provincial approval from the British Columbia govt, a province where more than 63% of the population are against the pipeline. B.C. has veto power. In addition, the dozens of native bands in the province need to be consulted, and if they disagree come building day (and they all disagree with the project right now), they have said they will physically block the building through their lands. And of course other environmental groups will let their presence be felt if building of the pipeline begins. There is NO WAY that pipeline will ever be built on the path across British Columbia as it is now planned. These are the major hurdles.
    17 Jun 2014, 07:29 PM Reply Like
  • lorneb
    , contributor
    Comments (275) | Send Message
     
    Peakoiler, Several of your statements are incorrect. You should do some research.
    17 Jun 2014, 09:40 PM Reply Like
  • zeusprune
    , contributor
    Comments (162) | Send Message
     
    You have it right PeakOiler. As a former resident of BC I can attest to the quagmire of First Nations hurdles blocking the pipeline. Canada has done a poor job of settling native treaties, particularly in BC. The legal challenges are just beginning.
    18 Jun 2014, 07:50 AM Reply Like
  • saratogahawk
    , contributor
    Comments (2529) | Send Message
     
    The Northern Gateway Pipeline makes Canada a true international oil champion. The economy of Canada will pop upwards with this pipeline. I own several Alberta oils and look forward to those dividends for the next many years.
    17 Jun 2014, 07:54 PM Reply Like
  • 1GreatCFA
    , contributor
    Comments (1301) | Send Message
     
    Be interesting to see how support for this project changes and more buildings burn down in Iraq. In other news Prime Minister Harper to join Enbridge Board in 2016. Over to you Christy.
    17 Jun 2014, 09:13 PM Reply Like
  • bobby44
    , contributor
    Comments (449) | Send Message
     
    It's just money! If there is enough then all 200+ conditions can be met. Today I do not think there is enough money. Some day there will be.
    17 Jun 2014, 10:11 PM Reply Like
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