May 17, 2011 / 10:27 PM / 8 years ago

Western Canada oil sands line years off-financier

* Canadian Natural’s top priority is Keystone XL

* Says security concerns will drive approval

* West Coast oil line will be third, financier says (In U.S. dollars unless noted)

By Jeffrey Jones

CALGARY, Alberta, May 17 (Reuters) - Canada’s energy industry will likely begin transporting natural gas to the Pacific Coast for export long before there is a major new pipeline to move oil sands-derived crude there, one of the country’s most successful investors said on Tuesday.

The first major market expansion will be TransCanada Corp’s (TRP.TO) $7 billion Keystone XL pipeline to the U.S. Gulf Coast, despite opposition from environmentalists and some U.S. politicians, said Murray Edwards, known for his stakes in the energy, financial, industrial and sports sectors.

But pipelines that would move growing volumes of western Canadian shale gas to the West Coast to be converted into exportable liquefied natural gas will be next, Edwards said.

“The third thing is to look at the options for alternate ways to be able to sell our oil sands production through markets other than the United States and the options for the West Coast pipeline,” he told reporters after an investor event sponsored by Canadian Natural Resources Ltd (CNQ.TO), where he is vice-chairman.

“That to me is longer-term. There are lots of challenges to be dealt with before that’s achieved.”

Canadian Natural currently has no plans to get involved in building LNG plants, he said.

Enbridge Inc (ENB.TO) is proposing the $5.5 billion Northern Gateway pipeline to the coast from Alberta, which would allow large volumes of crude from the tar sands to be shipped to Asia in tankers for the first time.

Kinder Morgan Energy Partners KMP.N is also proposing an expansion of its Trans Mountain pipeline.

The Enbridge plan is being met with opposition from several native groups along the proposed route and near the coast, who have rejected the company’s offers of stakes in the pipeline and money for community development.

The U.S. State Department has said it will rule on the Keystone XL pipeline by the end of this year. Canadian Natural has pledged 120,000 barrels a day to the project, making it the line’s biggest single shipper.

Edwards said he believes the U.S. government’s push for energy security will ultimately be the deciding factor in the project, which is under fire from environmentalists opposed to pipelines being built across several states as well as the rapid development of the Alberta oil sands.

“You have a market that has come to the conclusion that Canadian oil offers them security of supply that they cannot get from any other countries in the world, and it’s in a country that has high standards for environmental development,” said Edwards, who is also known for his interests in the National Hockey League’s Calgary Flames and a string of ski resorts.

“So, a priority of the country is to work with governments to get the Keystone XL pipeline completed.”

That project is likely two to four years away and the LNG developments are five to 10 years in the future, he said.

He did not specify when he believes a West Coast oil line will get built, but pointed out that the Mackenzie Valley gas proposal in the far North has been decades in the planning, but still not built.

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