The company, whose pipelines carry the lion's share of Canada's crude exports to the US, still expects oil sands output to triple to 3 million barrels per day by the middle of the next decade. That comes even as some analysts fear that projects may be cancelled if Alberta moves to boost its take from producers.

Richard Bird, executive vice-president at Enbridge, said royalties are not the biggest factor when it comes to deciding whether to go ahead with an oil sands project.

According to Bird, commodity prices, profit margins and construction costs remain the key drivers for oil sands projects.

"We're doubtful the royalty variable is going to be the make-or-break economic variable in those decisions," he said at an investor conference, Reuters reported.

A government-appointed panel last month recommended the province increase its take from oil and gas production by C$2 billion (US$2.01 billion), 20% more than its current revenue from the sector.

For oil sands projects, the panel recommended that royalties rise to 33% of revenue, from 25 percent today, after project costs are recouped. It also said a new tax should be levied on each barrel of production, which would rise as oil prices climb.

A report by energy consultants Woods Mackenzie said the royalty plan could cut the value of oil sands projects by $26 billion if the provincial government adopts the proposals.

Though some natural-gas producers have said they will cut spending in the province if the levies are raised, the oil sands sector has not yet followed suit.

Bird said Enbridge will likely proceed with new pipelines to take oil sands crude to US refineries in the Midwest and Gulf Coast. That includes its 450,000 bpd Alberta Clipper project to Superior, Wisconsin, to be complete by 2010, and the 2009 expansion of its Southern Access line, which will add 400,000 bpd of new capacity.

Bird also said the company would not need to ration space on its export pipes from Canada, despite a flood of output expected from new oil sands projects.

Enbridge believes that between its lines and those planned by rivals, there will be enough pipeline capacity to ensure oil producers do not face apportionment, a rationing of pipeline space.

"We're not expecting apportionment," Bird said. "There is, based on our forecast... enough capacity."

Some studies, including one from Canada's National Energy Board in July, warned that apportionment could begin by the fourth quarter of this year and last up to 18 months until new pipeline capacity is complete.

Published: 03 October 2007 18:36 GMT  | Last updated: 03 October 2007 22:39 GMT