The agreement, signed in Beijing, China by Enbridge President & Chief Executive Officer Patrick D. Daniel, provides that Enbridge will assist PetroChina to aggregate long-term supplies of Canadian crude oil. Enbridge and PetroChina have a number of crude supply initiatives under development with a target of approximately 200,000 barrels per day. Enbridge has separate initiatives to accumulate commitments from other potential shippers on the Gateway Pipeline to fill the remaining capacity.
“This is a positive step forward on a project which will have major benefits for Enbridge, for oil sands producers and for Canada, as well as for consumers in China and other offshore markets”
"This is a positive step forward on a project which will have major benefits for Enbridge, for oil sands producers and for Canada, as well as for consumers in China and other offshore markets," said Mr. Daniel. "However, there remains a great deal to be accomplished before the Gateway Pipeline can become a reality."
"Definitive long-term agreements for the sale of crude oil to the Chinese will need to be negotiated, as will longer term capacity commitments with other shippers. We will continue our consultation with the many aboriginal communities and other stakeholders, and we will need to complete our plans to minimize environmental impacts. Only when all of these matters are concluded in a manner which supports the commercial feasibility of the project will we be in a position to file a regulatory application."
Mr. Daniel added, "The agreement with PetroChina builds on a favourable environment for trade between Canada and China which has been cultivated by Prime Minister Paul Martin, and the efforts of Alberta Premier Ralph Klein to stimulate Chinese interest in the oil sands."
The Gateway Pipeline that Enbridge is proposing would be a new 30-inch diameter crude oil pipeline with design capacity of 400,000 barrels per day. It would provide a new export route to markets in the Asia-Pacific region and the United States west coast, and Enbridge continues to assess two potential ports - Kitimat and Prince Rupert - for the deep-water marine terminal that will be needed. The Company has already completed preliminary design work, engineering and environmental assessments of the pipeline, and, during the last three years, has been engaged in preliminary discussions with a number of stakeholders including shippers, governments and Aboriginal communities.
A regulatory application for the $2.5 billion, 1,160-kilometre (720-mile) crude oil pipeline would have to be made in 2006 to achieve a late 2009/2010 in-service date, which is when Enbridge's Western Canada crude oil supply forecast indicates that oil sands production will have increased to the level that access to a major new market will be beneficial to producers.
Gateway is one of a number of Enbridge initiatives to ensure that there is sufficient pipeline capacity to transport the estimated 700,000 to 900,000 barrels per day of incremental oil sands production that is anticipated by 2010. In addition to Gateway, Enbridge is developing projects such as the Spearhead, Southern Access and Waupisoo pipelines, and additional mainline expansion, to transport additional volumes of bitumen and synthetic crude oil to current North American markets and to new markets in the United States.
Enbridge Inc. is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids transportation system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,000 people, primarily in Canada, the U.S. and South America. Enbridge's common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the U.S. under the symbol ENB. Information about Enbridge is available on the Company's web site at www.enbridge.com.
Certain information provided in this news release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Although Enbridge believes that these statements are based on information and assumptions that are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings and American SEC filings. While Enbridge makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Enbridge assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
Enbridge Inc. (TSX:ENB) (NYSE:ENB)