POLITICS

Four companies back Enbridge's proposed Northern Gateway oilsands pipeline

01/04/2012 06:37 EST | Updated 03/05/2012 05:12 EST
CALGARY - Four companies say they back Enbridge's proposal to build a pipeline that would ship huge volumes of heavy crude from Alberta's oilsands to the B.C. coast.

Cenovus Energy Inc. (TSX:CVE), Suncor Energy (TSX:SU), Nexen Inc. (TSX:NXY) and Total E&P Canada have filed documents outlining their support to a federal review panel.

They say Enbridge's (TSX:ENB) $5.5 billion Northern Gateway project is needed to export Alberta's growing oilsands production to new markets in the Pacific basin.

"An approval of the application will allow Canadian oil producers to develop new markets and to increase prices," reads the document submitted by Cenovus.

Some of the companies also support Enbridge's plan to build a second adjacent pipeline to import light oily material to Alberta that is needed to dilute bitumen before it can be shipped.

Suncor says Northern Gateway is a critical piece of infrastructure for Canadian oil producers.

Nexen says the project would allow producers to diversify to markets beyond the United States and Canada.

"Northern Gateway would allow Nexen to have greater choice in managing its economic choices and risks and maximizing its netbacks through broader access to global markets and pricing."

Before Wednesday's filings, Sinopec, China's state-owned energy giant, was the only corporation that had announced financial backing for Northern Gateway.

Enbridge's plan calls for building two 1,170-kilometre-long pipelines from Bruderheim, Alta., to an oil tanker port to be built near Kitimat, B.C.

A series of two dozen public hearings into the project are to begin Tuesday in Kitimat.

More than 4,000 people have signed up to make presentations to the panel, including First Nations. Many who have registered say they oppose the project over fears of pipeline spills that could pollute pristine rivers and forests.

Some people are also worried shipping the crude in oil tankers along the rugged B.C. coast could result in catastrophic spills that could destroy marine life and harm tourism.

Environmental groups also say they plan to submit reports to the federal panel that shows building a new pipeline is not economically necessary.

The Alberta government says it plans to submit a report to the panel it commissioned that shows oilsands producers could lose up to $72 billion over nine years if the pipeline isn't built.

— By John Cotter in Edmonton