Construction on the Maritimes & Northeast Pipeline LLC system is under way to double the capacity of the existing pipeline and allow for delivery of significant new volumes of gas to growing markets in the U.S. Northeast and Maritimes Provinces, the pipeline said last week.

When the $320 million Phase IV Project is completed, the year-round mainline design capacity of the Maritimes system will increase by approximately 400 MMcf/d to almost 800 MMcf/d. Firm transportation capacity of 700 MMcf/d will be held by Repsol Energy North America, a subsidiary of Repsol YPF, which will sell its regasified liquefied natural gas (LNG) in the U.S. market.

“As construction progresses, Maritimes remains on schedule to begin delivering critically needed natural gas supply to markets next year,” said Maritimes President Doug Bloom. “The efficient expansion of the Maritimes system will enhance the reliability of natural gas supply and provide more energy options for consumers throughout the region.”

Maritimes will transport on its existing pipeline system regasified LNG sourced from the Canaport LNG receiving and regasification terminal currently being constructed in Saint John, NB. Canaport LNG is a limited partnership of subsidiaries of Repsol YPF and Irving Oil Ltd. Repsol Energy Canada has contracted for 100% of Canaport LNG’s capacity.

“Construction of Canaport LNG continues on schedule and will commence operations during fourth quarter 2008,” said Phil Ribbeck, director of LNG North America for Repsol YPF. “We are working diligently in concert with the pipelines to ensure that safe, clean and secure energy will reach the market in a timely manner, supporting its current and future needs.”

This year Maritimes will construct new compressor stations in Searsmont and Brewer, ME, and make modifications to an existing compressor station in Richmond, ME. In 2008, construction will include new compressor stations in Woodchopping Ridge, Westbrook, and Eliot, ME, and approximately 1.7 miles of 30-inch diameter pipeline in Baileyville, ME, along with modifications to existing meter facilities in Baileyville, ME, and Dracut, MA.

In July a Federal Energy Regulatory Commission order kept the Maritimes expansion out of a dispute over LNG tanker passage rights. Quoddy Bay LNG LLC had sought to block the Maritimes expansion unless a reciprocity condition was placed on the project that would have prohibited the flow of gas through the new facilities until the Canadian government allowed passage of LNG carriers through Head Harbour Passage, a treacherous stretch of water that straddles the U.S.-Canadian border. Canada’s decision to block passage would prevent LNG tankers from reaching the proposed Quoddy Bay and Downeast LNG terminals in Maine (see NGI, July 23).

And in April Canada’s National Energy Board granted a favorable environmental assessment to the Emera Brunswick Pipeline, a proposed 145-kilometer (90-mile) pipeline that will deliver gas from Canaport to markets in Canada and the U.S. Northeast (see NGI, April 16). Last year, Emera said it will invest approximately C$350 million for full ownership of the proposed pipeline, which will travel through southwest New Brunswick and connect with the U.S. portion of the Maritimes at the international border near Baileyville, ME. Emera has been an investor in Maritimes since its inception in 1999.

Maritimes is owned by affiliates of Spectra Energy Corp. (77.53%), Emera Inc. (12.92%) and ExxonMobil Corp. (9.55%).

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