Kinder Morgan retains a plan for a northern leg to its B.C. oil pipeline infrastructure, but the company says it is concentrating on expanding capacity south first.
"Down the road - I don't know how many years down the road - if a northern option proves to be viable, then we would look at it," Kinder Morgan spokesman Andrew Galarnyk said Tuesday.
Instead, Kinder Morgan is planning an open call late this year to determine interest for expanding capacity of its Trans Mountain Pipeline south to the Lower Mainland.
The 1,150-kilometres pipeline brings oil from the Alberta oilsands into B.C. near Valemount and south into the Lower Mainland, with connections to the U.S. at Sumas, and also overseas through a terminal in Burnaby.
The plans call for the 300,000 barrels-per-day pipeline to be expanded to 700,000 barrels per day.
Kinder Morgan will use a phased approach to reach its 400,000-barrel-per-day expansion.
Galarnyk noted that their expansion would respond to market demand, expanding, for example, by 80,000 or 250,000 barrels, if that's what is called for.
"We're not building on spec. We will be applying only with commercial certainty," said Galarnyk.
The expansion is considered competition to Enbridge's proposed $5.5-billion Northern Gateway pipeline, although Enbridge is far ahead of Kinder Morgan in developing its plan.
Enbridge's controversial 1,170-kilometre pipeline -- with a capacity of 525,000 barrels a day -- is already in the midst of federal regulatory proceedings. A federal panel will begin public hearings in early 2012.
If Kinder Morgan secured commercial interest for its southern expansion, it would have to prepare for and pass regulatory proceedings and public hearings.
Kinder Morgan already has a smaller application before the National Energy Board. It has applied to turn part of its capacity on the Trans Mountain pipeline into longer-term contracts from month-to-month contracts.
The company is doing this because it is getting more demand to push oil to its port terminal in Burnaby, driven largely by overseas oil demand.
The long-term pipeline terms would allow shippers to better secure long-term contracts offshore, said Galarnyk.
The long-term application asks for 54,000 barrels per day through the Burnaby terminal. Another 25,000 barrel per day of capacity would be allocated to the terminal on a month-to-month basis.
The 79,000 allocated to the Burnaby terminal is about the same volume being shipped through the terminal now. About 70 tankers are needed to take away the oil in smaller-sized Panamax and Aframax tankers that can carry between 350,000 and 650,000 barrels of oil.
Enbridge's pipeline plan in northern B.C. would required about 225 tankers a year to ship oil overseas.
