Spectra Energy Corp. and BG Group plc are planning a new natural gas transportation system from northeast British Columbia (BC) to serve BG Group's potential liquefied natural gas (LNG) export facility in Prince Rupert on the province's northwest coast.

The companies would each initially own a 50% interest in the project. Spectra would be responsible for construction and operation and BG Group has agreed to contract for all of the proposed capacity.

The approximately 850-kilometer (525-mile), large-diameter system would begin in northeast BC and end at BG Group's potential LNG export facility in Prince Rupert. The system would be capable of transporting up to 4.2 Bcf/d. The project also would connect with the Spectra system at Station 2 (southwest of Fort St. John), a growing gas hub that collects supply from multiple areas of the province and other supply basins in Western Canada.

"This project offers BC a unique opportunity to access new markets, strengthen its energy infrastructure, engage stakeholders in economic growth and job creation, and ultimately secure the province's position as a competitive energy leader," said Spectra CEO Greg Ebel. "Furthermore, today's announcement initiates our next wave of investment opportunity in BC. We are ideally positioned to create further value for our investors by leveraging surplus BC natural gas supplies and facilitating its export to high-demand markets in Asia. This, in turn, will provide multiple opportunities for further investment in our gathering and processing facilities in the province."

The Prince Rupert Port Authority began talks late last year with BG officials about the potential for an LNG export project that would rival those being considered for Kitimat, BC (see Daily GPI, Aug. 13). "We've entered into an agreement with the Prince Rupert Port Authority...to consider the feasibility of that development in that area," said BG spokesman David Byford earlier this year (see Daily GPI, Feb. 10).

Early conceptual routes have been developed for the pipeline project, Spectra said Monday. The companies will confer with stakeholders and file an application for the project with the BC Environmental Assessment Office. "Based on the results of these efforts, project construction is currently expected to commence mid-decade, with service starting by the end of the decade," Spectra said.

Spectra's gas system in BC currently moves about 2.4 Bcf/d.

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