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Proposed 1.8 Bcf/d Quebec Pipeline a Conduit for LNG Exports, Say Sponsors

A plan for a new natural gas pipeline across Quebec, sponsored by two California-based firms, could flow Canadian production into the global market via liquefied natural gas (LNG) exports by the mid-2020s.

Energie Saguenay, an export project proposed by Breyer Capital based in Menlo Park, CA, and Freestone International in San Francisco, has taken the first regulatory steps toward building the mammoth French Canadian gas conduit, titled Gazoduq.

The proposal, filed with the National Energy Board (NEB) and Quebec authorities as a formal pre-application description, calls for a 750-kilometer (450-mile), 42-inch diameter gas pipeline capable of delivering 1.8 Bcf/d.

“We believe the Energie Saguenay Project offers compelling fundamentals that will be attractive to investors and LNG buyers,” said the sponsors’ promotional material. A target date of 2021 has been set for starting construction.

The new Quebec shipments would start at an eastern Ontario link to TransCanada Corp.’s Mainline from Alberta and British Columbia. Preliminary estimates forecast a cost in the US$4.5-billion range for the French Canadian gas connection.

Gazoduq volumes would match the planned capacity for the Breyer-Freestone team’s proposed US$7.5-billion LNG export terminal, GNL Quebec, at a year-round ice-free port near the junction of the Saguenay River and the St. Lawrence River.

Although Quebec is a hotbed of resistance against fossil fuel operations from hydraulic fracturing to pipelines, industry is bred into the proposed terminal site. The area has a pedigree in the fur trade, forestry, minerals and railway operations that dates back to the 17th century.

The proposed GNL export terminal was granted a 25-year license by NEB in 2015. A 10-year sunset clause keeps the license valid if overseas tanker shipments start by mid-2025.

The California partners sponsoring Energie Saguenay are incorporated in Delaware as Ruby River Capital LLC. Two prominent entrepreneurs drive the project: Jim Breyer, an early investor in Facebook, and former Bechtel executive Jim Illich.

The Gazoduq pipeline description vows to ensure French Canadian LNG exports would respect environmental, community and aboriginal aspirations. Quebec public and government resistance played a role in the 2017 demise of the Energy East proposal for a cross-Canada oilsands export pipeline.

To reward support for a new gas pipeline, the LNG export team pledged to be a big new customer for Hydro Quebec. Use of electricity generated by the provincial government-owned power company’s dams would also make Energie Saguenay a contributor to lowering global greenhouse gas emissions, said the project sponsors.

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