Maritimes & Northeast Pipeline LLC last Wednesday formally withdrew its application at FERC to double the capacity of its transportation system in New England after the sole shipper to be served by the project, EnCana Corp., terminated its precedent agreement.

Maritimes’ decision to pull the proposal for its so-called Phase IV project did not come as a surprise. It notified the Commission in December of its intention in light of the fact that Canadian regulatory review of the upstream supply project that was to anchor the pipeline expansion — EnCana’s Deep Panuke natural gas development project offshore Nova Scotia — had been discontinued indefinitely (see NGI, Dec. 15).

EnCana pulled its applications for the Deep Panuke project from Canada’s National Energy Board and the Canada-Nova Scotia Offshore Petroleum Board late last year. At the time, it told regulators it was working to resolve technical and commercial issues associated with Deep Panuke, and that by withdrawing its applications, it was not signaling that the project was dead.

The Deep Panuke field has estimated natural gas reserves of about 1 Tcf, with daily production projected to be 400 MMcf.

Maritimes indicated that it was not ready to give up on the Deep Panuke project either. “Maritimes is continuing to work with EnCana to negotiate a new transaction that provides the optimal transportation arrangement for natural gas associated with the Deep Panuke project,” it told FERC.

“The development of offshore Nova Scotia reserves presents one of the most expeditious ways of meeting the Northeast’s demand for new energy supplies. Maritimes remains ready to proceed with future main expansion projects as necessary to bring new production in this frontier basis to market,” the pipeline said.

Maritimes and its Canadian pipeline affiliate reported last summer that they had spent approximately $15 million (US) on the Phase IV project, which included 31 miles of 36-inch diameter looping and compression in Maine. The expansion would have doubled Maritimes’ existing system capacity to 800 MDth/d from 415.5 MDth [CP02-78]. EnCana had signed a long-term agreement for the entire 385 MDth/d of firm transportation capacity that would have been created by the expansion.

Maritimes is owned by affiliates of Duke Energy, Westcoast Energy Inc., ExxonMobil and Emera Inc.

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