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Enbridge confirms Chinese firm investing in Gateway pipeline

The chief executive of Enbridge Inc. confirmed Thursday a major Chinese oil company is backing its controversial oil pipeline between Alberta and the West Coast.

Sinopec is among producers and refiners that have together matched Enbridge's $100 million early-stage investment in the Northern Gateway proposal, Pat Daniel told a CIBC investment conference in Whistler, B.C.

"That speaks to the level of commitment that they've got, in that they're investing upfront," he said.

Sinopec, one of many Asian players to invest in the oilsands over the past few years, is the only Northern Gateway backer to be publicly identified so far.

The $5.5-billion Northern Gateway proposal has been dogged by vehement opposition from First Nations communities along the route and near the coast, as well as from environmentalists.

The groups worry a spill could damage the rivers and lakes the pipeline would traverse and that tanker traffic along the B.C. coast will harm that fragile ecosystem.

Northern Gateway would consist of two parallel lines. One would ship oilsands crude to the Pacific coast, where it would be loaded on to tankers and sold overseas. The other would bring imported light crude inland to Alberta, to be used to dilute thick oilsands bitumen and enable it to flow more easily in a pipeline.

The ability to reach energy-hungry Asian markets would add $2 or $3 to the value of each barrel of oilsands bitumen, bolstering the bottom lines of Alberta producers, Daniel said.

"And that's because it puts producers in a position where they can negotiate with downstream refiners and say, 'You know what? I'm shipping off the West Coast for this month,'" he said.

"That's huge for the Alberta government in terms of royalty revenue. It's huge for all producers in Western Canada."

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