Enbridge Inc. has confirmed Sinopec Corp., China's largest-oil refiner, is part of a consortium of producers and refiners that provided $100 million to push its controversial Northern Gateway project through the regulatory process.
An investment in the consortium gives a company the right for capacity on the $5.5-billion pipeline and an ownership stake.
The 1,170-kilometre pipeline -- which would pass just north of Prince George -- is just beginning a federal review expected to take two years.
The funding from Western Canadian oil producers and southeast Asian refiners matched $100 million already invested by Calgary-based Enbridge.
Sinopec is the only funder of the consortium that has been identified, as Enbridge has refused to divulge the names of the contributors.
"Earlier this week, Sinopec indicated it was one of the funding partners -- so, I guess we can now speak to them," Enbridge president and CEO Pat Daniel told an investors conference at Whistler.
Sinopec's refining capacity ranks third in the world, according to the company. It's refineries are mainly located in China's southeast coastal area.
That a Chinese refiner is part of the project is no surprise. The Northern Gateway's main purpose is to open up new markets in Asia for Alberta oil sands crude. Virtually all Western Canadian oil flows to the United States.
Daniel told the Whistler conference that the independent analysis Enbridge has commissioned shows oil produced in Western Canada would receive a $2 to $3 per barrel premium as a result of the Northern Gateway outlet. "That's because it puts producers in a position to negotiate with downstream refiners, who can say, 'You know what -- I'm shipping off the west coast this month,'" said Daniel.
The price increase would provide huge benefits for the Alberta government through royalty increases, as well as for all producers in Western Canada, Daniel told the conference.
