Westcoast CEO Michael Phelps said yesterday the company is planning to double the capacity of the Maritimes & Northeast Pipeline system to transport more than 1.2 Bcf/d in five years but expects an additional expansion to 2 Bcf/d by the end of the decade.
“We are already planning the next stage of expansion of the Maritimes and Northeast Pipeline,” Phelps said in a speech to the Halifax Chamber of Commerce in Nova Scotia on Wednesday. “We were the first to build a natural gas pipeline to help unlock the energy riches offshore Nova Scotia; we want to be the pipeline that moves this second stage of natural gas supply to market.”
Phelps noted the industry already has committed to spending $1 billion this decade to develop the reserves offshore Nova Scotia. Maritimes plans to transport the growing production through looping and compression projects. “This would cost something in the order of $1 billion, approximately $400 million of which would be spent in Canada,” he said. “An expansion of our line would provide the quickest, most efficient way to take on the new production represented by the [Sable Offshore Energy Project] tier II and PanCanadian production.” The Sable project currently produces about 540 MMcf/d.
“Expanding our pipeline will be the least intrusive option on the environment,” he said, alluding to plans of other pipeline companies and producers, most notably El Paso and Marathon (see Daily GPI, May 7), which announced plans for a feasibility study on a new pipeline from offshore Nova Scotia to New York City.
“Incremental expansion of our main line is also the least expensive option for gas shipments,” said Phelps. “In the end, our increased shipments on the line actually lower the toll for all producers by a significant amount.”
Phelps said the company expects to “move quickly” with its expansion plans and will “not slow down the producers ability to get natural gas to market as soon as they have received regulatory approval and built and commissioned their production systems.” He expects Maritimes to have an expansion in place in time to carry PanCanadian’s Deep Panuke production when it begins to flow in 2005.
“We also see the opportunity to expand again by the end of this decade to a capacity of 2 Bcf/d… That is a four-fold expansion of the existing line. This would cost a further $1 billion, much of which would be spent in the region. As soon as new natural gas supplies are available for the markets, we will have the capacity in place to carry it. That is our pledge. Our history here already shows that M&NP keeps its promises.”
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