Calgary based, Enbridge Inc, is exploring opportunities outside North America, with plans to develop a multibillion-dollar pipeline through Columbia.
The company said that it’s been in contract with five shippers in Columbia about building a 760-kilometre pipeline from oilfields in the interior of the country to its west coast. The pipeline could cost up to $6 billion, although CEO Al Monaco said that a final estimate has not been calculated yet.
It will allow crude oil in the area to be easily exported to Asia.
Al Monaco said:
“Where we are right now is we’re in the process of trying to work through the environmental work and the commercial work with these five shippers that needs to be done before we can make any kind of decision and that should hopefully happen by the end of 2015 – could be a little bit later than that,”
He said that Enbridge has a series of projects planned through to 2018, of which $33 billion have been commercially secured.
The company wants to diversify and operate outside North America, looking for opportunities abroad and build more of a presence in power generation.
In the past Enbridge owned pipelines in Spain and Columbia but sold its interests in the areas years ago to help expand its oil network in North America.
Vern Yu, Enbridge’s senior vice-president of corporate development, expressed the company’s interest in also expanding in Australia, adding that the company will be very selective when picking projects.
Vern Yu said:
“Really what we’re looking for is to get opportunities to replicate our business model in North America where there are strong market fundamentals in the country that we’re going to invest in and the projects have the same kind of risk profile that we have here in North America.”
In Australia production of natural gas is expected to triple over the next five years and Columbia has said it wants to increase oil production by 20 to 30 percent over the same time period.
Enbridge is more likely to build new gas pipelines, although buying existing infrastructure is also an option. The company wants to double its capacity of power generation by 2018 to 3,000 megawatts.
Yu said that the market for wind power in Texas and that expanding gas-fired projects in Alberta are also opportunities the company will consider.
Executives of the company expressed the challenges that they will face in building new pipeline projects.
Monaco said:
“Executing these projects today is, make no mistake, a bigger challenge, mainly permitting delays that stem from opposition to energy and the need for regulators to really demonstrate a robust review of all projects,”
“This is not going to get easier, so a strong project management capability is absolutely essential today.”
