Northern Gateway pipeline unlikely to start up by 2018, project president says

The president of the Northern Gateway pipeline says it’s unlikely the project will start-up in 2018 as the company seeks to win over B.C. First Nations groups, many of which remain adamantly opposed to the $7.9-billion project.

CALGARY — The president of the Northern Gateway pipeline says it’s unlikely the project will start-up in 2018 as the company seeks to win over B.C. First Nations groups, many of which remain adamantly opposed to the $7.9-billion project.

“We have stated that the earliest in-service date was 2018. That’s quickly evaporating because we need to have this time to meet with people,” John Carruthers told a Calgary business audience on Thursday.

“I’m not as fussed on what that date is, I’m more fussed on can we have the support we need to go ahead, so it’s positive for all people of Canada, including aboriginal people.”

“That’s going to take time and it’s going to take the time it takes.”

So far, 26 First Nations groups along the route have signed agreements with Enbridge to take a share of a 10 per cent equity stake in the pipeline that the company had offered. Enbridge is now in talks with other groups about other ways to participate in the project, such as employment and procurement contracts.

“There’s a lot of dialogue with both equity owners and non-equity at this point,” Carruthers told reporters

Many First Nations along the route are vehemently opposed to the pipeline and have said they wouldn’t accept it under any circumstances. Lawsuits could tie the project up in court for years.

If built, Northern Gateway would ship 525,000 barrels per day of diluted oilsands crude from the Edmonton area to Kitimat, B.C., where the oil would be loaded onto tankers and shipped to Asia. A smaller parallel line would ship condensate, an oilsands thinning agent, in the opposite direction.

Northern Gateway received regulatory approval in June, but the company proposing to build it, Enbridge Inc. (TSX:ENB) has said it’s not in a rush to put shovels in the ground.

Carruthers said despite the delays, support from customers remains strong.

The ability to access Asian markets is an enticing proposition for oilsands producers, as it would mean better prices for their crude. But most producers have signed on to a variety of pipeline proposals to the west, east and south rather than bet that any one proposal will come to fruition.

Analysts have said other proposals, such as TransCanada Corp.’s (TSX:TRP) proposed Energy East pipeline to New Brunswick, are likely to be built before Northern Gateway.

In addition to discussions with First Nations, Enbridge is also in the process of pinning down a new cost estimate and working through 209 conditions imposed with the regulatory approval.

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