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Nexus Customers Cleared to Move NatGas From Ohio to Canada

The Ontario Energy Board has approved applications from Spectra Energy Corp. subsidiary Union Gas Ltd. and Enbridge Gas Distribution Inc. for 15-year contracts to move natural gas from the Appalachian Basin into the Union Gas Dawn Hub in Ontario on the Nexus Gas Transmission system.

The step is another important hurdle for Nexus, which filed with FERC in November for a certificate to construct the $2 billion system (see Daily GPINov. 23). The project anticipates that the Federal Energy Regulatory Commission will issue a notice to proceed with construction by 1Q2017. The system is expected to be in service by the end of that year.

"These approvals confirm strong, long-term market support for our route and the project from demand-pull markets represented by these local distribution companies in Ontario," said Bill Yardley, president of U.S. transmission and storage for Spectra, which is backing the project along with DTE Energy Co.

The proposed 255-mile Nexus pipeline would deliver 1.5 Bcf/d Appalachian natural gas from receipt points in eastern Ohio, to markets there, in Michigan, Chicago and into Canada, where the system would extend to the Dawn Hub -- one of North America's largest physically traded gas hubs.

While the project has faced staunch opposition in parts of Ohio and Michigan, including reroute requests, it would relieve capacity constraints in the Marcellus and Utica shales (see Shale DailyJune 19). It is also supported by capacity commitments from producers as well a growing number of local distribution companies, industrial facilities and power generators in the areas it would serve.

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