Eastern Canadian Pipe Link Planned

A new round of expansion is getting under way in the budding natural gas industry in eastern Canada, starting with construction of the last missing link in the country's transcontinental pipeline grid. Longer range, there are possibilities of a new major pipeline to transport Atlantic Canada production to major markets.

Gaz Metropolitain in Montreal and Calgary-based Enbridge Inc. have teamed up to complete the system with a project called Cartier Pipeline. The plan calls for a C$270 million (US$186 million) line to run 164 miles along the St. Lawrence River between Quebec City and the western border of New Brunswick, plus an allied short link to Maritimes & Northeast Pipeline. The 20-inch line is scheduled to go into service by 2004, capable of carrying 184 MMcf/d immediately and up to 340 MMcf/d with the addition of compressors.

In a reversal of a quarter-century of older plans to complete the transcontinental system by extending eastbound-TransCanada PipeLines and TransQuebec and Maritimes Pipeline, the Cartier line will flow west to enable Gaz Metro's Quebec distribution grid to tap into M&NE and the Sable Offshore Energy Project. President Robert Tessier said "the additional supply security and diversity provided by a link into the East Coast basin is of strategic importance to Gaz Metropolitain and our Quebec gas."

Enbridge likewise plans to use the project as a supply source. The Cartier line will enable additions to the new gas distribution system that the Calgary company is building in New Brunswick, and serve as an alternative supply source for the western Quebec and eastern Ontario distribution franchise of Toronto-based Enbridge Consumers Gas.

At the same time, Enbridge president Pat Daniel confirmed that a much bigger plan is gestating behind the scenes. PanCanadian Petroleum Ltd. is considering proposals that it sought from Enbridge for connecting its Deep Panuke discovery offshore of Nova Scotia to markets in both the northeastern United States and eastern Canada. After four straight stunning drilling successes with 15,000-foot-deep wells 150 miles out to sea southeast of Halifax, PanCanadian has set a target of making a development decision in February.

The pipeline proposals potentially run into the C$1-billion range. In the midst of the drilling campaign a year ago, before enough wells had been drilled to document the full extent of the find, PanCanadian raised the possibility of a 400 MMcf/d production development costing C$645 million (US$445 million). Daniel said Enbridge presented PanCanadian with a range of possibilities. They include an entirely new, subsea direct route to the U.S. Atlantic seaboard from the production field.

Daniel said he suspected that idea was less likely to carry the day than a less dramatic second major option, connecting to M&NE's land route across Atlantic Canada to the Boston area with a resulting expansion of its capacity. There are also understood to be discussions on a new land route capable of serving both Atlantic Canadian and northeastern U.S. markets. The land route is likely to appeal most Canadian federal and provincial policy-makers because it offers to enhance domestic gas supply security and diversity.

Gordon Jaremko, Calgary

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