Spectra Energy Corp has announced that the company has signed a Project Development Agreement with BG Group plc, planning a new natural gas pipeline system in northern British Columbia (BC). The project, worth as much as Cdn$ 8 billion (US$ 8.2 billion), will transport the fuel from the province's shale gas fields to a proposed LNG export facility.
The proposed 850 km (525 mile) pipeline will have the capacity to carry as much as 4.2 billion ft3/d of gas from the northeast corner of BC. Spectra, which operates pipelines in Canada and the US, said it hopes to build the pipeline to connect to the LNG plant planned by BG at the port of Prince Rupert.
The province's shale gas deposits contain trillions of cubic feet of natural gas, far from North America's natural gas markets, but close enough to the Pacific coast to make LNG development viable. This has led to a multitude of planned LNG infrastructure, of which the Spectra pipeline is the latest.
Five recent gas liquefaction projects proposed for the province's northern Pacific coast to tap Asian demand for fuel include: Kitimat LNG's facility, owned by Apache Corp, Encana Corp and EOG Resources Inc; and projects planned by Royal Dutch Shell Plc and others, which are still in their early stages.
Gary Weilinger, Vice-President at Spectra's Western Canadian operations confirmed the line is still in the initial planning stages and would be unlikely to be completed until at least 2015.
“We've got just very high-level, preliminary work," he said. "There are going to be a number of different alternatives that we're still exploring in terms of routing, depending on some of the sensitive areas that we may or may not need to go through. It's still very early days.”
While a firm capital budget for the project has not yet been determined, Weilinger said the project would likely cost between Cdn$ 6 - 8 billion.
Built by Spectra, the joint-venture partner BG will contract for all the pipeline’s capacity, as it looks for supplies to fill its LNG plant.
Spectra Energy has operated in BC for more than half a century. The company’s natural gas transportation system in BC moves around 2.4 billion ft3/d of natural gas; employs more than 850 men and women; pays nearly Cdn$ 65 million in property taxes and contributes around Cdn$ 1 million annually in community investments across the province. The company is nearing completion of a Cdn$ 1.5 billion BC expansion programme, which created more than 1350 construction jobs and resulted in Cdn$ 120 million in contracts with Aboriginal and local contractors in the province.
Edited from various sources by Cecilia Rehn.