Oilsands firms commit to Northern Gateway

Five of Canada's largest oilsands producers have publicly revealed shipping and financing deals in support of Enbridge Inc.'s controversial Northern Gateway oil pipeline before hearings that begin next week on the $5.5-billion project.

The disclosures, in public documents filed with the National Energy Board on Wednesday, were hailed by Enbridge as further evidence of industry backing.

The environmental community opposed to the project said the pipeline is no closer to reality.

Nexen Inc., Cenovus Energy Inc. and MEG Energy Corp. revealed in writing to the Joint Review Panel assessing Northern Gateway that they are so-called "funding participants" financing some early stage costs of the 1,200-kilometre proposed pipeline from Bruderheim to the coastal community of Kitimat, B.C.

They have all also signed "precedent agreements" which reflect support to ship on the line.

Suncor Energy Inc. and Total E&P Canada Ltd. also acknowledged signing precedent agreements in filings and told the Herald separately they are also financially backing the project.

None of the companies publicly stated the extent of their financial support or volumes they've committed to the pipeline.

China's No. 2 state-owned oil company, Sinopec Corp., said in 2010 it was among partners helping to fund Northern Gateway. It was the first and only company, before Wednesday, to reveal its financial support.

Last August, Enbridge said shippers had booked the entire capacity of the pipeline.

The line, which would transport up to 525,000 barrels of oil per day, is viewed by the oilpatch and potential Asian customers as a vehicle to get increasing oilsands production overseas to new markets.

The federal and Alberta governments have lent support to Northern Gateway for its economic benefits but British Columbia has not taken a position.

Enbridge spokesman Todd Nogier said a group of corporate supporters of Northern Gateway had agreed to put up $100 million in funding, largely to cover pre-construction work and regulatory costs.

He said that figure could rise to reflect a year or longer extension of the review announced recently, to late 2013.

"It's a good day for the project because it illustrates something we've already known, that there is good, solid, energy industry support for the project," Nogier said.

The documents were made public as upwards of 4,000 participants - a record number for a regulatory review - prepare to speak at community hearings starting next week in Kitimat Village, B.C., regarding the project. The National Energy Board and Canadian Environmental Assessment Agency reviewing Northern Gateway plan to issue a recommendation to the federal government late next year.

A Suncor spokeswoman, Sneh Seetal, said the company, Canada's largest oil and gas producer, is considering all shipping options to help it reach the goal of producing one million barrels of oil per day by 2020, one driven primarily by oilsands development.

"The Northern Gateway pipeline is a critical piece of infrastructure that will provide Canadian oil producers with a diversified market access for the growing oil production," Seetal said.

Saphina Benimadhu, a spokeswoman of Paris-based Total SA's Canadian subsidiary, said Northern Gateway promises to ensure new pipeline capacity for growing Alberta oil production, including from Total.

"It's for all of our projects, so we're looking at Surmont, Fort Hills and for the Joslyn North Mine, as our flagship project," Benimadhu said.

Juan Plessis, a pipelines analyst at Canaccord Genuity in Vancouver, said Northern Gateway hasn't inched any closer to fruition after Wednesday's declaration from oil and gas producers, since it was already known that Enbridge had shipper commitments and pipeline funding.

"All we know now is, who are the shippers," Plessis said, noting the project won't go ahead unless the economics make sense for Enbridge.

The company also has to conquer strident and vocal opposition from First Nations and environmental groups concerned about pipeline spills and more oil tankers in coastal waters. Opponents are buoyed by "star power" from Hollywood actors, including Robert Redford, Leonardo DiCaprio and Kevin Bacon, Plessis said.

"It's still a tough go. It's a hard sell."

Emma Gilchrist, spokeswoman for the Victoria-based Dogwood Initiative, which opposes Northern Gateway over environmental concerns for British Columbians, said the pipeline lacks a "social licence" on the West Coast. "The project isn't any closer to reality, but it's nice to know who British Columbians are dealing with."

rpenty@calgaryherald.com