Pipeline giant Enbridge Inc. says it won’t immediately plow ahead with construction of Northern Gateway in British Columbia even if Ottawa approves the contentious project.
“We are going to take a very prudent approach to the project from here regardless of the federal government’s decision,” Enbridge chief executive Al Monaco said at the company’s annual meeting Wednesday.
Responding to opponents of Northern Gateway who spoke at the meeting, Mr. Monaco said the dialogue with them will continue regardless of what Ottawa decides. He said people shouldn’t expect to see shovels in the ground if the project is accepted – the company will continue to talk to First Nations.
Mr. Monaco said he expects the federal cabinet to soon deliver a final response to the National Energy Board joint review panel’s December recommendation to approve Northern Gateway.
“Our understanding is that the federal government is committed to meeting its June timeline for a final decision,” he said of the project, which is subject to more than 200 conditions.
But “the regulatory process is one step,” he said earlier Wednesday. “The focus now is on re-engaging some of the aboriginal groups and stakeholders along the right of way to better understand their views and address any remaining concerns.” He said he doesn’t know how such consultations would affect the timeline for Northern Gateway.
First Nations groups at the annual meeting vowed the project will be challenged in court even if approved by the federal government.
Earlier Wednesday, Mr. Monaco said the pipeline company wants to play a major role in the development of British Columbia’s burgeoning natural gas export industry.
Canada’s largest oil exporter, which now ships 65 per cent of Western Canadian oil, sees big opportunities in northern B.C., Mr. Monaco said as the company reported strong first-quarter earnings.
Enbridge already has a majority stake in the Cabin gas plant in the Horn River Basin, and in March purchased a $20-million parcel of land at Grassy Point near Prince Rupert, an area where a number of proposed liquefied natural gas (LNG) terminals are centred – a move interpreted by many as a sign the company is considering joining the push to export LNG to Asia.
Last year, Mr. Monaco told a Toronto investors conference that the company is talking with natural gas producers about building a pipeline to carry supplies to the coast.
On Wednesday, during an earnings conference call, he reiterated his interest. “With all of what’s going on in northern B.C. today with respect to development for future LNG projects, and just generally the amount of drilling for natural gas liquids in particular, there’s a lot of demand for natural gas midstream infrastructure.
“We think given the magnitude of those projects and the number of them, a company like Enbridge, I think, can play a very strong role.”
Enbridge reported first-quarter earnings of $390-million or 47 cents a share – including a number of unusual items – compared with $250-million or 31 cents a year earlier.
“We’re pleased to have roughly matched last year’s strong first quarter, and this year – in contrast to last year – we’ll see much stronger quarter over quarter uplifts in the subsequent quarters of the year,” Enbridge chief financial officer Richard Bird said on the call. “At this point, we remain on track with our guidance with no significant headwinds or tailwinds yet apparent.”
The company reported that liquids pipelines performance was slightly below last year as growth on Canadian Mainline, primarily owing to strong supply from Western Canada, was offset by lower tolls and the absence of revenue from Line 9B. Running between Southern Ontario and Quebec, Line 9B is being reversed and expanded to give Central Canada refiners access to more affordable Western Canadian and North Dakota oil.
The company also emphasized the March announcement of its $7-billion program to replace Line 3, a major oil pipeline, to boost overall shipping capacity to the United States while sharply reducing the maintenance bill. It’s the largest project in the company’s history.