Small pipeline projects intended to achieve big increases in Canadian imports of shale gas from the United States were launched Tuesday in Ontario by Union Gas Ltd. and Enbridge Gas Distribution Inc.

As Spectra Energy's southwestern Ontario distributor, Union partnered with the eastern gas distribution arm of Calgary's Enbridge Inc. to announce an open season for capacity on new facilities proposed to deliver up to 800 MMcf/d. Enbridge also pledged to work on a further addition of pipe into the Toronto core of its franchise territory.

The additions, called the Parkway Extension Project, are short stretches of pipeline designed to remove a transportation bottleneck that limits shipments between Enbridge's eastern Ontario network, including Toronto, and the Dawn storage and trading hub in Union's southwestern Ontario territory.

With capacity to store more than 260 Bcf of gas, accept injections of 4 Bcf/d and send out 6 Bcf/d, Dawn sits just across the Canadian border from Michigan on a pipeline crossing beneath the St. Clair River. The southern Ontario gas hub, where trading volumes already exceed 10 Bcf/d, has connections to the Michcon, Vector, ANR, Great Lakes, Bluewater and Panhandle pipeline systems.

The project announcement follows a prediction by TransCanada Corp., in a hotly contested rate case before the National Energy Board, that a move by rivals to bypass its Niagara Falls border crossing between Ontario and New York State is inevitable unless Alberta suppliers agree to let the connection be reversed for imports (see Daily GPI, March 7; Feb. 27).

Union Vice President Mark Isherwood described the project as a way to "enhance Ontario's ability to access diverse and competitive supply sources, which will support a growing Ontario economy and an increasing demand for affordable and reliable energy.”

A Union description of the plan said, "The Dawn hub is strategically located and is well connected to several supply basins including the U.S. Midwest, U.S. Rockies, shale gas basins -- Marcellus, Utica, Barnett and Haynesville -- and the Western Canadian Sedimentary Basin."

Union identified the main anticipated new source -- shale gas from the developing Marcellus formation in the eastern United States -- in an address to a 2010 market review by the Ontario Energy Board, which has long encouraged diversifying the province's supplies beyond its traditional reliance on Alberta. The Canadian subsidiary of Spectra called shale gas a "game changer" and predicted that the "Marcellus Shale will continue to grow and will be an important source for Ontario supply going forward."

The southern and eastern Ontario markets are not the only regions that have shown early interest in making the prediction come true. In launching the open season, Union reported that Quebec distributor Gaz Metro LP has also entered the lineup.

From the Dawn hub, gas traders can make deals on eastbound delivery routes through the most heavily populated parts of Ontario and Quebec, then across the border into the northeastern U.S. via export links such as Iroquois.

Union and Enbridge are offering new firm gas transportation service starting in 2014 or 2015. The open season runs through April 25. A variety of services are available for rates ranging from C1-15 cents/gigajoule (U.S. dollar at par) depending on origins and destinations of new gas deliveries.

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