Canadian Manufacturing

New east coast LNG projects could choke supply

Nova Scotia's gas distributor Heritage Gas applied wants supply assurances before new plants are approved



HALIFAX—The senior manager of Nova Scotia’s natural gas distributor says his company wants to ensure that it has adequate access to the sole pipeline into Atlantic Canada if liquefied natural gas export terminals are approved in the region.

Heritage Gas applied in May to intervene in licence applications by three potential LNG export facilities filed with the National Energy Board.

The subsidiary of AltaGas says if the proposed East Coast projects by Pieridae Energy Ltd., Bear Head LNG and the Saint John LNG Development Co. Ltd. are accepted by the board, it would like assurances there is enough space in the pipeline.

Heritage Gas president Chris Smith says as offshore natural gas supplies to the Maritimes are depleted in the next few years, the Maritimes and Northeast Pipeline operated by Spectra Energy could be a key source of supply.

“There’s a limited capacity on the Maritimes and Northeast (Pipeline) system and we want to make sure any gas supply challenges are addressed as part of the application,” said Smith in a telephone interview.

The executive estimates the export projects could add a requirement of about 750,000 gigajoules a day of natural gas to the existing requirement of about 250,000 gigajoules flowing through the pipeline to domestic clients.

That would be more than double the pipeline’s current capacity of 450,000 gigajoules per day, he added.

Steve Rankin, manager of external affairs at Maritimes and Northeast Pipeline, says the company would ensure existing customers are supplied.

He says that adding shipments to export terminals could actually lower the overall costs of using the pipeline.

“It would be one of those good problems to have … It would be a good case for an expansion of our Maritimes and Northeast Pipeline. Just by adding compression stations we could double the capacity,” he said.

“Compression is a very cost effective way to add capacity … Our rates would actually trend downward if we had an expansion in that way.”

He said the pipeline is currently expanding in the northeast U.S. to bring more Marcellus Basin natural gas into its system, and this should be available as early as 2017.

The LNG export terminals would likely come onstream after that date, he added.

Mark Brown, a spokesman for Pieridae Energy, says it’s possible the export projects would also encourage the development of natural gas projects in the region and ultimately increase local supply.

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