Nipigon LNG, a pioneer of extending natural gas distribution into northern Ontario, has won a promise to cooperate from TransCanada Corp. after two years of waiting for a supply commitment from the midstream company’s cross-country Mainline.
The pledge emerged from a flurry of filings at the National Energy Board (NEB) after Nipigon LNG Corp. applied for an order to make the pipeline allow a new outlet for communities on the north shore of Lake Superior.
“Increased economic access to new and existing markets is key,” said the Canadian Association of Petroleum Producers (CAPP) in a letter to the NEB that expressed strong support for Nipigon LNG.
“TransCanada should endeavor to work closely with new potential customers,” added Centra Gas Manitoba Inc.
Canadian gas producers and distributors have a common interest in traffic growth on the Mainline, to counter eroded deliveries and upward pressure tolls that have resulted from competition by low-cost shale production in the United States.
The NEB filings include confirmation that Nipigon LNG’s parent company, Northeast Midstream LP, has secured distribution franchises with five northern Ontario towns: Manitouwadge, Marathon, Schreiber, Terrace Bay and Wawa. The agreements select trucked liquefied natural gas (LNG) as the most economic supply for the widely scattered communities along the north shore of Lake Superior.
TransCanada assured the NEB that Nipigon LNG’s service request would be granted when standard pipeline requirements for a contract covering costs are satisfied and a construction permit for a new outlet is obtained.
TransCanada acknowledged that Nipigon LNG has sought Mainline gas since October 2016. But the pipeline blamed the delay in arranging service on the prospective customer.
Nipigon LNG refused to allow disclosure of its northern delivery plan to southern and eastern distribution companies that the Mainline has agreed not to bypass with new delivery connections, TransCanada said. As a result, assurances that the newcomer would not be a competitive threat were unavailable.
CAPP told the NEB that “the non-bypass commitment made by TransCanada and the LDCs should not impede other industry participants from conducting normal business on a federally regulated open-access pipeline.”
Nipigon LNG, named after the nearest community to its proposed liquefaction plant, only seeks to draw about 7 MMcf/d off TransCanada’s cross-country gas Mainline with a 500-meter (1,635-foot) leg of new pipe.
But the project only begins growth encouraged by an Ontario gas distribution expansion program. The provincial government estimates the scheme has potential to serve 33,000 households that established distribution networks have not yet reached in more than 70 remote communities.