CALGARY, Alberta, Oct 24 (Reuters) - Enbridge Inc (ENB.TO) is considering offering aboriginal groups an equity stake in its planned 525,000 barrel a day Northern Gateway oil sands export pipeline in order to secure support for the project, a company official said on Friday.
Enbridge, Canada’s No. 2 pipeline company, is still working out details of how large a stake it would offer to native communities along the pipeline’s route. As well, it has to firm up how any such stake would be financed.
“We are getting the details of the package worked out before we take it to the First Nations communities,” Steven Greenaway, vice-president of Enbridge Northern Gateway Pipelines, said in an interview.
“I think the timetable for that will be in the next couple of months, but it’s a complicated issue, one that we are having discussions with them now in principle about.”
Another pipeline project already has native groups as a partner. Imperial Oil Ltd (IMO.TO), and other partners in the planned C$16.2 billion Mackenzie Valley natural gas pipeline, in 2000 offered the Aboriginal Pipeline Group (APG) up to a one-third stake in that line in return for the backing of the small aboriginal communities along the route.
Financing for the APG was provided by TransCanada Corp (TRP.TO), the biggest Canadian pipeline firm, in exchange for an eventual small stake in the line. However the project has been mired in regulatory delays and cost overruns and has yet to be built.
Greenaway said Enbridge is still trying to define the details of any arrangement with native groups. The line’s route across northern Alberta and British Columbia runs close to about 60 different aboriginal communities.
“They would all have the same opportunity to participate,” he said.
The Northern Gateway pipeline will carry 525,000 barrels of oil sands crude 1,170 km (725 miles) from Edmonton, Alberta, to a deep-water port at Kitimat on British Columbia’s northern coast, where it would be shipped to refineries in Asia and on the U.S. West Coast.
A separate line will carry 193,000 barrels a day of ultra-light oil from Kitimat to Alberta for blending with the tar-like oil sands crude so that it can be shipped on pipelines.
The company’s last estimate for the cost of the line was C$4.5 billion ($3.5 billion). However that tally is three years old. Project costs have jumped since then and the line’s size was increased from a 400,000 bpd project.
It plans to complete the line by early 2015.
Enbridge shares fell 40 Canadian cents to C$38.75 on the Toronto Stock Exchange on Friday. The shares have risen 2.6 percent over the past year. ($1=$1.28 Canadian) (Editing by Rob Wilson)