Canada's Oil May Head to Asia as U.S. Delays Pipeline (ENB), (KMP)
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Following a move by Washington to push back the approval of a key oil pipeline, which would run from Alberta to the Gulf of Mexico, the Canadian government has begun looking for alternatives to distribute its large quantity of oil.
One of the alternative options, proposed by Enbridge (NYSE: ENB), includes building a 730 million pipeline running from Alberta to a deep-water terminal in Kitimat, British Columbia. The new line would cost roughly $5.5 billion and offers a more practical model to reach the fast growing Asian market for Canada. Enbride's outlook indicates if the pipeline is approved in 2013, it could be up and running by 2017. The plan has received support from U.S., Canadian, and Asian firms.
Kinder Morgan Energy Partners (NYSE: KMP) has offered up a $4 billion expansion plan, which entails a pipe branching off of an existing line, currently running to the U.S., to Kitimat. Kinder Morgan is also developing a strategy to build a new segment that would distribute oil to the Kitimat terminal.
The delay from U.S. government may end up saving face with a number of environmental agencies and groups, but it may also end up costing the country a strong and close supply of oil. Canada's government knows there is money to be made with their oil supply and also knows how long the U.S. government can delay or deliberate over a decision.
While no one can doubt that a project of this magnitude includes serious deliberation and thought, delays such as this are preventing global growth and are weighing heavy on global markets and countries. Political parties around the world continue to be at each others throats, at the cost of the people.
One of the alternative options, proposed by Enbridge (NYSE: ENB), includes building a 730 million pipeline running from Alberta to a deep-water terminal in Kitimat, British Columbia. The new line would cost roughly $5.5 billion and offers a more practical model to reach the fast growing Asian market for Canada. Enbride's outlook indicates if the pipeline is approved in 2013, it could be up and running by 2017. The plan has received support from U.S., Canadian, and Asian firms.
Kinder Morgan Energy Partners (NYSE: KMP) has offered up a $4 billion expansion plan, which entails a pipe branching off of an existing line, currently running to the U.S., to Kitimat. Kinder Morgan is also developing a strategy to build a new segment that would distribute oil to the Kitimat terminal.
The delay from U.S. government may end up saving face with a number of environmental agencies and groups, but it may also end up costing the country a strong and close supply of oil. Canada's government knows there is money to be made with their oil supply and also knows how long the U.S. government can delay or deliberate over a decision.
While no one can doubt that a project of this magnitude includes serious deliberation and thought, delays such as this are preventing global growth and are weighing heavy on global markets and countries. Political parties around the world continue to be at each others throats, at the cost of the people.
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