After about half a year of negotiations, a first step has beentaken towards filling in the last missing link in the Canadianeast-west pipeline grid for natural gas. The Quebec and NewBrunswick governments set a date of Feb. 28 for a formal signingceremony for an agreement-in-principle on promoting construction ofa gas link between their provinces.

The capacity of the line, its cost and the date of itsconstruction remain up in the air. New Brunswick Premier BernardLord said that the line could be extended from Fredericton toEdmunston in northwestern New Brunswick, close to the Quebec cityof Riviere-du-Loup. “We would hope that our efforts will contributeto ensuring the necessary market to enable a lateral to be builttoward northwestern New Brunswick from an interconnection point,near Fredericton, with the Maritimes & Northeast (M&N)Pipeline system,” the premier said. Although he has set his sightson seeing the link built in five or six years, the industry ismaking no promises except to keep on looking into the matter.

The feasibility of a new connection is under study byTransQuebec & Maritimes Pipeline on the western side and thenew Maritimes & Northeast Pipeline on the East Coast. TQ&M,owned by TransCanada PipeLines and Gaz Metropolitain, reaches asfar as the Quebec City region.That is about 250 miles short ofthe western-most reach of M&NP, which was completed last fallby Westcoast Energy, Exxon Mobil, Duke Energy and NS Power Holdingsas the primarily export transporter for the Sable Offshore EnergyProject.

The TQ&M group unsuccessfully sought, with the Quebecgovernment’s backing, to take away the East Coast pipeline projectfrom MN&P. The big prize in the region was transportation ofSOEP gas to the northeastern United States. Although there are ahandful of industrial customers in food processing, oil refining,mining and forest products, the market is sparse in the region.

A small population, combined with a notoriously thin industrialbase, has repeatedly held back the pipeline project. A completeeast-west hookup has been an on-again, off-again plan since the1970s, when the federal and provincial governments proposed it asan energy security measure. In its new incarnation, the proposal isbeing promoted as a way both to diversify outlets for SOEPproduction and give Atlantic Canadian consumers a chance to shoparound by gaining access to western supplies.

Construction on the SOEP began in January 1998. The owners,Mobil Oil Canada (50.8%), Shell Canada (31.3%), Imperial Oil (9%),Nova Scotia Resources (8.4%) and Mosbacher Operating Limited (5%),estimate the reserve potential of the project at 3.5 Tcf of naturalgas, of which Mobil’s share is 1.8 Tcf. Gordon Jaremko, Calgary;

John Norris

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.