A new round of expansion is getting under way in the buddingnatural gas industry in eastern Canada, starting with constructionof the last missing link in the country’s transcontinental pipelinegrid. Longer range, there are possibilities of a new majorpipeline 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 CartierPipeline. The plan calls for a C$270 million (US$186 million) lineto run 164 miles along the St. Lawrence River between Quebec Cityand the western border of New Brunswick, plus an allied short linkto Maritimes & Northeast Pipeline. The 20-inch line isscheduled to go into service by 2004, capable of carrying 184MMcf/d immediately and up to 340 MMcf/d with the addition ofcompressors.
In a reversal of a quarter-century of older plans to completethe transcontinental system by extending eastbound-TransCanadaPipeLines and TransQuebec and Maritimes Pipeline, the Cartier linewill flow west to enable Gaz Metro’s Quebec distribution grid totap into M&NE and the Sable Offshore Energy Project. PresidentRobert Tessier said “the additional supply security and diversityprovided by a link into the East Coast basin is of strategicimportance 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 distributionsystem that the Calgary company is building in New Brunswick, andserve as an alternative supply source for the western Quebec andeastern Ontario distribution franchise of Toronto-based EnbridgeConsumers Gas.
At the same time, Enbridge president Pat Daniel confirmed that amuch bigger plan is gestating behind the scenes. PanCanadianPetroleum Ltd.is considering proposals that it sought fromEnbridge for connecting its Deep Panuke discovery offshore of NovaScotia to markets in both the northeastern United States andeastern Canada. After four straight stunning drilling successeswith 15,000-foot-deep wells 150 miles out to sea southeast ofHalifax, PanCanadian has set a target of making a developmentdecision in February.
The pipeline proposals potentially run into the C$1-billionrange. In the midst of the drilling campaign a year ago, beforeenough wells had been drilled to document the full extent of thefind, PanCanadian raised the possibility of a 400 MMcf/d productiondevelopment costing C$645 million (US$445 million). Daniel saidEnbridge presented PanCanadian with a range of possibilities. Theyinclude an entirely new, subsea direct route to the U.S. Atlanticseaboard from the production field.
Daniel said he suspected that idea was less likely to carry theday than a less dramatic second major option, connecting toM&NE’s land route across Atlantic Canada to the Boston areawith a resulting expansion of its capacity. There are alsounderstood to be discussions on a new land route capable of servingboth Atlantic Canadian and northeastern U.S. markets. The landroute is likely to appeal most Canadian federal and provincialpolicy-makers because it offers to enhance domestic gas supplysecurity and diversity.
Gordon Jaremko, Calgary
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