Maritimes & Northeast Pipeline’s (MN&P) proposed Phase IV expansion project to carry an additional 400 MMcf/d of gas production from EnCana’s Deep Panuke project offshore Nova Scotia received a green light from Canada’s National Energy Board (NEB) but with certain conditions.

While the NEB approved the application to construct the pipeline facilities in Nova Scotia and New Brunswick, it suspended the date at which the approval will go into effect because of a conditional agreement between the pipeline and EnCana.

The board said the suspension was needed because of the unique nature of the supply arrangements between M&NP and EnCana, which has a one-time right, by July 31, 2003, under its firm service agreement to decrease its contract volume of 400,000 MMBtu/d by any quantity up to a maximum of 200,000 MMBtu/d.

The NEB said its approval will go into effect after July 31, 2003 or when M&NP makes certain filings, one of which is the filing for approval of a revised engineering design for the facilities proposed to support the contracted volumes if those end up being less than 400,000 MMBtu/d.

The board also noted EnCana’s evidence that it is continuing to negotiate with potential domestic customers of natural gas. Therefore, the condition was added in case revisions to the applied-for facilities are required as a result of proposed domestic deliveries or if EnCana exercises its one-time right to decrease its contract volumes for some other reason.

M&NP applied to construct one custody transfer meter station and two compressor stations in Nova Scotia and two compressor stations in New Brunswick. The facilities are required to provide transmission service for EnCana from Goldboro, NS, to the St. Stephen, NB, export point starting in 2005. The estimated cost of the facilities is C$190.8 million. The Phase IV expansion project will increase the capacity of the Maritimes system to 1 Bcf/d.

In February, Maritimes filed an application for the US$250 million U.S. portion of the project with the Federal Energy Regulatory Commission. The U.S. portion of the Phase IV project includes construction of four compressor stations in Maine, each with 26,800 horsepower of additional compression, and 31.3 miles of additional pipeline loop facilities in Maine’s Washington County. The new compressor stations are proposed to be located in the municipalities of Eliot, Gorham, Brewer and Searsmont.

The Phase IV expansion complements its already completed Phase III 25-mile extension from Methuen to Beverly, MA. The extension interconnected the 650-mile Maritimes pipeline with Algonquin Gas Transmission Co.’s 1,000-mile system through Algonquin’s proposed HubLine project. HubLine includes 30 miles of 24-inch diameter offshore pipe from Beverly to Weymouth, MA, and five miles of 16-inch diameter offshore lateral to the Massachusetts Water Resources Authority facilities located on Deer Island. The two pipeline projects are designed to supply up to 230,500 Dth/d to the New England region and are expected to be in service before the end of the year.

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