Kitimat selected for Enbridge's Gateway Pipeline

Kitimat, B.C., Selected as End-Site Location for Enbridge's Gateway Project
Enbridge news release, 14-Oct-2005
$4-billion pipeline to land in Kitimat
Scott Simpson, Vancouver Sun, 15-Oct-2005

COMMENT:Good news in Kitimat; Disappointment in Prince Rupert, the other potential terminal location for the proposed Gateway Pipeline, which - if built - will transport oil from Alberta's oilsands to China and other markets, including, possibly, the US. A Chinese company has already secured half the capacity of the Gateway project. (link)

Dashed hopes at Fortune Minerals, as well, which appears to have won a quiet move by the federal government to sell Ridley Island Terminals near Prince Rupert (link). Revenues from the Gateway project will not now be part of Ridley Island's future.

It won't look like boom town in Kitimat for a while, as the Methanex plant closes on November 1 and 125 or so people are out of jobs. But EnCana has an option on the Methanex site for a "soluent" terminal facility (link), and Gateway is actually two pipelines, the oil export pipe, and a "condensate" import pipe. Even if the EnCana project and the Enbridge condensate project eventually become just one project, Kitimat is going to be busy. Then there's the Galveston Kitimat LNG project on the books as well, proceeding through a BC environmental assessment with little fanfare. (link)

But the big issue: oil tankers in Douglas channel. There's some understanding that a tanker moratorium is in place on the coast. Does it apply to the oil tankers that will be taking Gateway oil to China and elsewhere? What do the Haisla and Haida think of this? What do the salmon think of this?

NEWS RELEASE TRANSMITTED BY CCNMatthews Printable Version
FOR: Enbridge Inc.

TSX SYMBOL: ENB
NYSE SYMBOL: ENB

OCT 14, 2005 - 12:30 ET

CALGARY, ALBERTA--(CCNMatthews - Oct. 14, 2005) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) is pleased to announce that after months of fieldwork, Kitimat, British Columbia, has been selected as the end-site location for the proposed Gateway Project. Key factors in the decision to select Kitimat were the deepwater port and abundant industrial land.

"Enbridge is very excited about the Gateway Project and what it will mean to the North Coast of British Columbia," said Art Meyer, President of Gateway Pipeline Inc. "We believe this project will bring economic benefits not only to Kitimat, but the entire region during both the construction and operation phases."

The Gateway Project is estimated to cost approximately $4 billion and will consist of a petroleum export pipeline and a condensate import pipeline along the same right-of-way, and a marine terminal. The pipeline will run from Strathcona County, near Edmonton, to Kitimat.

"The Gateway Project is good news for Kitimat and will provide many opportunities for our community in the future," said Mayor Richard Wozney of the District of Kitimat. "We have worked hard over the last number of months to attract Enbridge as a corporate citizen and look forward to working with them."

The Gateway Project is expected to generate thousands of direct jobs during construction and up to 75 permanent jobs for the operation of the pipeline, marine terminal and related facilities.

Over the past three years Enbridge has met with communities and First Nations, interest groups and governments to discuss the Gateway Project and is committed to open and transparent consultation about the project.

Once commercial certainty and regulatory approval are achieved for the Gateway Project, Enbridge anticipates starting construction in 2008, with the pipeline being operational in 2010.

Gateway Pipeline Inc. is a wholly owned affiliate of Enbridge Inc. that has been created to manage the development of the Gateway Pipeline.

Enbridge Inc., a Canadian company, 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 4,400 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.

BACKGROUND INFORMATION ON THE ENBRIDGE GATEWAY PROJECT

- The Gateway Project, estimated to cost approximately $4 billion, involves the proposed development of two new pipelines, a new marine terminal, tankage, pumping stations and related facilities.

- The Gateway Project will run from Strathcona County near Edmonton to Kitimat, British Columbia.

- Key factors in the decision to select Kitimat as the end-site location for the pipeline were the deep-water port and abundant industrial land.

- The pipeline will be 1,200 kilometres in length.

- The petroleum export pipeline will be 30-inches in diameter and designed to move an average of 400,000 barrels per day.

- The condensate import pipeline will be 20-inches in diameter and designed to move an average of 150,000 barrels per day.

- Condensate is a by-product of natural gas production and is used as feedstock to oil refineries but its primary use in Western Canada is to dilute heavy oil for easier transport by pipeline.

- Certified marine tankers will be used to either import condensate or export petroleum. The marine terminal will include tankage, emergency response equipment, tanker births and other related facilities.

- Enbridge anticipates filing the National Energy Board application for the Gateway Project in April 2006, beginning construction in 2008 and having the pipeline operational in 2010.

- The socio-economic benefits during construction of the project are estimated at $1.52 billion in BC and $1.26 billion in Alberta.

- During the operation of the Gateway Project, the socio-economic benefits are estimated at $107 million per year in BC and $60 million per year in Alberta.

- The Gateway Project is an important part of Canada's energy future and will help ensure there is enough capacity to transport new oil expected from Canada's oil sands in the years to come.

FOR FURTHER INFORMATION PLEASE CONTACT: Enbridge Inc.
Jim Rennie
News media:
(403) 231-3931
Email: jim.rennie@enbridge.com

or

Enbridge Inc.
Bob Rahn
Investment community:
(403) 231-7389
Email: bob.rahn@enbridge.com
Website: www.enbridge.com

or

NATIONAL Public Relations
Michelle Ward
(604) 970-5901
Email: mward@national.ca

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GATEWAY I Enbridge project means thousands of jobs for northwest B.C.

Scott Simpson
With files from Leanne Ritchie, Prince Rupert Daily News
Vancouver Sun
October 15, 2005

The final decision on a Pacific terminal for Enbridge's $4-billion Gateway pipeline project came down to money, with Kitimat announced Friday as the Calgary company's preferred location.

The sprawling pipeline project, slated to span some 1,200 kilometres from Edmonton to the Pacific Ocean, is expected to create a mini-job boom and economic spinoffs worth about $1.5 billion for the B.C. economy.

A route to Prince Rupert would have cost at least $500 million more than Kitimat, although an Enbridge spokesman said communities across northern British Columbia will benefit from the project.

The company expects unspecified "thousands" of jobs during a two-year construction phase and about 75 permanent jobs including about 35 at the terminal in Kitimat.

Gateway Pipeline Inc. president Art Meyer said economic spinoffs will include materials purchases, construction jobs and indirect employment.

The company hopes to gain all regulatory approvals by 2007 and have the pipeline operational by 2010.

"Certainly this is great news for Kitimat, and Terrace, and the region," said Kitimat Mayor Richard Wozney, who was in Terrace for the announcement.

"We welcome this industrial investment. I think it will be a great addition to our community and to our private port operation in Kitimat.

"This will add to our reputation as being somewhat of an energy hub and a petrochemical centre. We hope they will get through all of their regulatory approvals, start construction in 2008 and be in operation in 2010."

Gateway involves twin pipelines between Kitimat and Edmonton -- a condensate line taking oil-thinning materials east from a terminal in Kitimat to oil processing facilities in Alberta, and a larger petroleum line carrying crude oil to the West Coast.

The project must still address regulatory and market hurdles -- including signing up enough pipeline customers to make the lines economic.

Meyer noted during a teleconference with reporters that the proposed condensate line already has strong support from shippers.

Later this month Enbridge will embark on an "open season" for expressions of interest from shippers for the petroleum line -- which passed a major milestone earlier this year when PetroChina signed a memorandum of understanding for half its capacity.

"We have decided on Kitimat as the end point for the pipeline. That's really been based on economic criteria, as well as the deep water port and industrial land that's available in the area. But the primary factor was economic and a business case determined Kitimat was the most appropriate choice," Meyer said.

"With that said, we certainly do see this project being an economic benefit to the entire region and we've been pleased to work with all communities in the region to pursue that.

"We are looking forward to working hard over the next while to make this vision a reality, both through the phase in which we will be confirming commercial certainty, then through the regulatory approval process, and finally into construction."

Meyer said the pipeline route to Prince Rupert was longer, but it would have meant a shorter travel time for tankers plying the route from a B.C. terminal to potential markets in California and Asia.

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