Enbridge touts ‘Alberta Clipper'
By DAVID EBNER
Globe and Mail Update
Thursday, February 2, 2006
CALGARY — The Enbridge Inc.-TransCanada Corp. rivalry intensified Thursday when Enbridge announced a new pipeline to carry Alberta oil-sands crude to the United States, directly taking on a TransCanada proposal that made a major advance earlier this week.
Enbridge is calling its proposal “Alberta Clipper,” a 400,000 barrel a day line that would run alongside the company's existing mainline, whose capacity is about two million barrels a day and carries most of Canada's oil to the U.S.
Alberta Clipper — a $1.6-billion (U.S.) project — would reach Wisconsin and then connect with a line to keep moving the oil to Chicago and further into Illinois.
The Clipper announcement was made as Enbridge reported fourth-quarter results. Profit for the period ended Dec. 31 was $174-million (Canadian) or 51 cents a diluted share, up from $105-million or 30 cents in the year-earlier period.
TransCanada, which owns natural gas pipelines, wants to get into the oil business and on Tuesday announced it had secured long-term shipping contracts totalling 340,000 barrels a day for its proposed Keystone project. The $2.1-billion (U.S.) line would also move oil sands crude to Illinois from Alberta.
One analyst on an Enbridge Inc. conference call Thursday wondered if Alberta Clipper would get beyond the drawing board, given TransCanada's lead with Keystone.
“Is this just wishful thinking or is this real?” the analyst asked.
It is absolutely real, declared Enbridge chief executive Patrick Daniel, who said Alberta Clipper is justified by large increases in output expected from the oil sands.
“This is not in competition with anything,” Mr. Daniel said.
Keystone was first announced a year ago and was dismissed by many industry players but with long-term contracts in hand, the project has made a big step forward and TransCanada plans to file regulatory documents later this year.
Keystone could be in service in late 2009, TransCanada has said, and Enbridge said Alberta Clipper could be moving oil in 2010.
From Enbridge news release, 02-Feb-2006
Enbridge Reports Another Excellent Year; Robust Outlook for Growth
We anticipate that additional capacity to the U.S. Midwest, over and above Southern Access, will be required. We have been actively developing the next tranche of mainline expansion capacity, the Alberta Clipper Pipeline, with selected shippers. The Alberta Clipper project involves a new 36" line from Hardisty, Alberta to Superior, Wisconsin where it will interconnect with the existing mainline system to provide access to our full range of delivery points and storage options, including Chicago, Toledo, Sarnia, Patoka, Wood River and Cushing. The line would involve an investment of US$1.6 billion ($2005) for an initial capacity of 400,000 bpd. We believe that this will provide the lowest toll and greatest delivery and storage flexibility for shippers seeking additional capacity to the Midwest. It is a project with no unusual regulatory or execution risks and can be timed accurately to provide capacity when required. Shipper interest to date has been strong, and we will expand these discussions during the first quarter of 2006 to seek broad industry support for the Alberta Clipper Pipeline project.
Posted by Arthur Caldicott on 02 Feb 2006