The Canadian government approved Enbridge Inc. (ENB)’s Northern Gateway pipeline, eliminating the final major regulatory obstacle for the conduit that would move Alberta oil to the Pacific coast for shipment to Asia.
The approval of the C$6.5 billion ($6 billion) project by Prime Minister Stephen Harper’s cabinet is subject to Enbridge satisfying the 209 conditions placed on the proposal by a regulatory review panel in December, Natural Resources Minister Greg Rickford said in a statement from Ottawa.
“The proponent clearly has more work to do in order to fulfill the public commitment it has made to engage with Aboriginal groups and local communities along the route,” Rickford said in the statement.
Canada’s petroleum producers are seeking ways to get land-locked and price-depressed Alberta crude to world markets, especially after delays to TransCanada Corp.’s proposed Keystone XL pipeline. Harper’s government has made building energy infrastructure a national priority, part of C$650 billion of investment in more than 600 existing or planned projects over the next decade to develop the country’s natural resources, including the world’s third-largest pool of recoverable crude reserves.
Crude producers such as Canadian Natural Resources Ltd. and Cenovus Energy (CVE) Inc., facing a five-year average discount of almost $20 a barrel for their oil relative to U.S. benchmarks, are seeking new markets.
Canadian oil-sands output is set to more than double to 4.1 million barrels a day by 2025 from 2013, according to the Canadian Association of Petroleum Producers, an industry group.
