Partial approval was granted Friday to the first in a planned series of additions to the northbound freeway for growing U.S. natural gas exports to central Canada.
The Ontario Energy Board (OEB) authorized C$425 million (US$382 million) for construction of capacity expansion facilities on a leg of the Union Gas (Spectra Energy) transmission and distribution network known as Dawn Parkway.
Union is still awaiting approval of federally regulated aspects of the additions from the National Energy Board (NEB), but it predicted a favorable decision in time to start construction this spring and put the new capacity into service by late 2015.
The facilities include 14 kilometers (eight miles) of 48-inch diameter jumbo pipe plus large compressors to drive high volumes of gas. The project will expand traffic through the Dawn storage and trading hub in southwestern Ontario, making increased imports possible across the connected systems of Enbridge Gas and Gaz Metro.
At the same time, TransCanada Corp., Union, Enbridge and Gaz Metro are applying for NEB approval of a settlement that ends disputes over potential bypasses of the TransCanada Mainline and lays out plans for cooperative expansions of routes north from the U.S. border and east across Ontario and Quebec (see Daily GPI,Jan. 24).
The entire package is designed to increase central Canadian access to nearby U.S. shale gas sources, primarily from the Marcellus formation.
In a statement accepting the OEB approval, Union said, "With the decline in western Canadian supplies available to serve eastern Canada and the emergence of abundant, affordable gas supplies located close to Ontario in areas such as Pennsylvania and Ohio, the demand for natural gas transportation along the Dawn Parkway transmission system continues to increase."
Since 2008, U.S. exports to Canada have more than doubled to a record high approaching 1 Tcf/year (see related story). Union President Steve Baker said, "Our investments, in conjunction with coordinated infrastructure projects by Enbridge Gas Distribution and TransCanada, will give residents, businesses and industries in Ontario and Quebec reliable access to affordable and diverse supplies of natural gas."