NGI The Weekly Gas Market Report
Maritimes & Northeast Pipeline (M&NE) declared an openseason for its interconnect with Algonquin’s proposed Hublinepipeline last week, as the entire project enters the final stagesof completion. With impending operation date in November fastapproaching, activity has sparked throughout the Northeast Coast inanticipation.
“Nothing – there are no regulatory matters or anything else wecan see that will prevent us from starting in November,” said JohnSheridan, spokesman for M&NE. He added that the pipeline’sinitial capacity will be the full 530,000 MMBtu/d it is designedfor. Of the total, 360,000 MMBtu/d will go to U.S. markets.
The open season, which runs through Sept. 30, asks for capacityrequests from buyers intent on using M&NE’s interconnect withHubLine at Salem, MA. Maritimes’ Canadian affiliate, Maritimes& Northeast Pipeline Ltd. Ptnr., will contemporaneously conductan open season for its pipeline in Canada, the company said.
During the open season, Maritimes will accept capacity requeststo any delivery point on the system, including the Salem point. Thefirm transportation services offered will be provided on anon-discriminatory, open access basis. Service to delivery pointsfor the initial expansion is expected to commence as early as 2000and nominations for services starting at different periods will beaccepted and evaluated.
Duke, operator and part-owner of M&NE, expects the pipelineproject to be at the head of a major expansion drive offshore ofCanada’s East Coast. The Canada-Nova Scotia Offshore PetroleumBoard recently awarded 19 exploration licenses offshore NovaScotia, where the Sable Offshore Energy project is nearingcompletion of three production platforms that will fill Maritimes’initial capacity. More licenses are expected to be awarded inOctober. At the same time, the Nova Scotia Petroleum Directoratehas circulated bids on 2.25 acres of land drilling rights.
Pat Langan, M&NE president said “with the introduction ofthese new energy sources to the Maritimes and northeastern UnitedStates, we anticipate a growing demand for natural gas. Inaddition, we expect to see growth in the exploration and productionof natural gas in eastern Canada.”
In Newfoundland, an industry and government alliance called theNatural Gas Stakeholder Committee announced it has awarded acontract to start a market study to the international researchhouse of ICF Consulting Group. The work kicks off a second,detailed phase of research that earlier took an inventory of gasresources associated with oil production developing on the GrandBanks. The Newfoundland region is estimated to harbor 33 Tcf ormore of gas.
A Canadian federal cabinet minister from Newfoundland describedthe market studies for Grand Banks gas as a matter of keen interestfor governments eager to light a fire under the regional economy.George Baker, secretary of state for the Atlantic CanadaOpportunities Agency, said the effort is collecting enoughinformation to launch “meaningful dialogue with otherstakeholders,” not least the production industry.
While the Canadian markets are studied, M&NE continues totry and access well-known U.S. markets. By connecting with theHubLine project, the pipeline will access the burgeoning powergeneration area around Boston, MA. “Now that M&NE is beingcompleted, we feel that now, more than, ever, there is a market anda supply for this system,” said Sheridan. “Our focus is in theBoston and southeastern Massachusetts areas. That’s where we feelthe market really is.”
The $300 million, 70-mile HubLine project would extend from aconnection with the Joint Facilities line in Plaistow, NH, in asoutheasterly direction for about 34 miles to the coast and thentravel under water along the eastern seaboard for about 24 miles tointerconnect with existing Algonquin facilities. If built, thepipeline would be designed for 600,000 Dth/d and commenceoperations in 2002. Shippers would have access to Sable Island gasthrough Maritimes, domestic supply through Algonquin’s existingsystem and possibly LNG from Algonquin’s liquefaction facilitiesnear Boston.
An open season held by Algonquin for Hubline started in lateJuly and concluded last month (see NGI, July 26). Sheridan said theproject received positive results, but would not disclose them.”We’re waiting for Maritimes to conclude its open season before weannounce anything.”
While Sheridan said the company is optimistic, he admittedHubline is nowhere close to filing with FERC yet.
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