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Central Canada-Bound Capacity Targets U.S. Shale Output

Southwestern Ontario's natural gas distribution company, Union Gas Ltd., confirmed Friday that further expansion is planned on the northbound pipeline network into central Canada from the United States.

Union announced an open season for new capacity of up to 1.2 million gigajoules (1.1 Bcf/d) between its Dawn storage and trading hub and gateways into the TransCanada, Enbridge and Gaz Metro systems serving eastern Ontario and Quebec.

Union, a Spectra Energy affiliate, said the additions could come in two stages: up to 650,000 GJ/d as of 2017, then another 550,000 GJ/d in 2018. The route delivers to the northeastern United States via central Canadian export points as well as to Ontario and Quebec.

Union said up to C$2 billion (US$1.8 billion) in new investments in its system are being considered.

"Changing North American natural gas supply dynamics have increased market demand" for transportation service in the central and eastern Canadian region, said Union Vice President Mark Isherwood.

U.S. exports into Canada more than doubled to nearly 1 Tcf per year since 2007 as shale gas development proliferated. About three-quarters of the northbound traffic flows from an array of U.S. and Canadian pipeline connections through the Dawn hub, which currently has storage capacity of 155 Bcf.

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