Northern towns await pipeline decision

Scott Simpson
Vancouver Sun
October 04, 2005

Whether Enbridge picks Prince Rupert or Kitimat, oil line will benefit both

A $3.5-billion pipeline project that would create thousands of construction jobs and light up the economies of communities across northern British Columbia is about to take another major step in its development.

Enbridge Pipeline's Gateway project envisions two 1,200-kilometre pipelines running from Edmonton to the B.C. coast, either at Prince Rupert or Kitimat, and the company said Monday that an announcement of the final choice for the line's western terminal is just days away.

No matter which city is finally chosen, benefits are expected to resonate across the north.

"It's pretty significant all the way along the route in terms of benefit to the local communities and to the province as well," said Doug Ford, a community consultant with Enbridge Pipelines.

The number of permanent jobs at a loading-unloading terminal would number about 40, but the mayors of both coastal cities see the project as a key aspect of economic revitalization.

Prince Rupert has been hurting, employment-wise, since the closure of the Skeena Cellulose pulp mill several years ago, while Kitimat is reeling after a recent announcement by Methanex that it is closing its Kitimat methanol plant because North American natural gas prices make it a money-loser.

Both mayors have taken Enbridge on tours of their local port facilities, but insist they're not privy to a final decision.

"We've made our arguments that Kitimat is a better location than the other location, based on cost, based on the fact that we're an industrial community, and we have the land available, and so on," Kitimat Mayor Richard Wozney said.

"We've got our ears to the ground and we're waiting for the thunder to hit Kitimat."

Prince Rupert Mayor Herb Pond said the project, coupled with container port development and cruise ship stops, could create enough critical mass to support a whole new marine industry in his community.

Overall, he added, the project would be great news for all communities in northern B.C. -- Enbridge said it will require "thousands" of workers during a two-year construction project that could begin as early as 2007.

"Obviously, the first hit is the construction phase, which is going to be great for everybody in the north. The only negative [that] one might talk about at all is that it's going to require so many people that it may in fact drain from other projects. But we'll deal with that problem," Pond said.

The Gateway project includes an oil pipeline carrying Alberta crude to the coast, and a separate line carrying an oil-thinning condensate in the other direction -- from a Pacific coast terminal to Albertan oil fields.

Enbridge announced on Monday that the open season -- the sign-up period for shippers to indicate their interest in participating -- for the condensate line was a roaring success.

The open season ended on Friday with enough response that the company now plans to increase the diameter of the pipeline to about 51 centimetres (20 inches) from about 41 centimetres (16 inches).

The open season for the oil pipeline is expected to commence later this month.

The oil line will not be commercially viable until Enbridge signs up enough shippers to fill the pipe -- although the company took a major step forward last April when it announced that PetroChina signed a memorandum of understanding for shipments encompassing about half the line's 400,000- barrel-per-day capacity.

The proposed pipelines must also receive approval from the National Energy Board and the Canadian Environmental Assessment Agency, as well as support from more than 40 B.C. and Alberta first nations along the proposed route.

"Based on the open season, we can now be confident we will have at least the minimum required threshold of 150,000 barrels per day committed to the line, and probably more," said Richard Bird, a vice-president at Enbridge, in a company news release.

"The successful open season on the condensate line also means we will be able to focus on lower tolls for the crude oil line."

Enbridge will stage open house meetings in several B.C. communities along the pipeline route beginning n extmonth.

A meeting is scheduled for Kitimat on Oct. 18, but Wozney said that's "not necessarily" an indication his city will be selected for the route. Obviously, I hope that will be the case."

Prince Rupert Mayor Herb Pond had a similar story.

"Enbridge representatives were up through the area two weeks ago, and met with council, just doing a general update," he said. "They continue to have teams of people in our community doing economic assessments and all those kinds of things. But there's no hint yet as to what decision they've made . . ."

ssimpson@png.canwest.com