BEIJING - Sinopec Corp., China's second-largest energy company, has struck a partnership with Enbridge Inc. on the proposed $5.5-billion Northern Gateway pipeline.
"We are participating," Hou Hongbin, vice-president responsible for exploration and planning at Sinopec International Petroleum Exploration and Production Corp. (SIPC), a subsidiary of Sinopec, said in an interview in Beijing.
However, Hou, along with other Sinopec executives, declined to say whether this means the government-controlled company will invest directly in the project.
The proposed pipeline will shuttle oil-sands crude 1,172 kilometers to a port in Kitimat, B.C., so it can be shipped to markets in Asia.
Deng Hanshen, deputy director general in Sinopec's development planning department, said in a slide presentation at a conference in Beijing last fall that "Sinopec (is) involved in pre-stage work in the project and provide(s) support."
Deng outlined Sinopec's activity in Canada in three slides: He first detailed Sinopec's joint venture with France's Total SA on the Northern Lights oil-sands project, which is undergoing feasibility studies; then he showed the Northern Gateway slide; and finally, he highlighted Sinopec's US$4.65-billion investment in Syncrude Canada Ltd. Both the Northern Lights and Syncrude slides stated that Sinopec has made equity investments, while the Northern Gateway slide did not.
Enbridge owns 100 percent of Northern Gateway. However, the company sold 10 units for $10 million each to potential shippers in 2007 and 2008. In exchange, the buyers have the option to buy equity stakes in the pipeline in the future. In addition, they will pay lower tolls than other shippers.
The $100 million is being used to fund Enbridge's costs as its Northern Gateway proposal winds through the regulatory process.