Local distribution companies Gaz Métro, Union Gas and Enbridge Gas Distribution, announced that they have reached an agreement in principle with TransCanada Pipelines Ltd. that would protect natural gas supply for Québec and Ontario natural gas customers.
Energy East pipeline
TransCanada's Energy East oil pipeline project proposes the conversion of an existing natural gas pipeline to oil service. The agreement resolves concerns that were raised by the three local distribution companies, and in public consultation and reviews conducted by the Ontario and Québec governments.
The agreement ensures the firm transportation capacity required for gas supply to Ontario and Québec and, if the Energy East project goes forward, the agreement provides a benefit of approximately CAN$100 million to natural gas customers through 2050. The agreement also ensures that natural gas customers will not subsidise the oil project; rather, the construction and development cost risks for Energy East will be borne by the project's proponents.
Comments on the agreement
"We stayed the course, adhering to a single fundamental principle throughout the process: ensuring that our customers' interests are well protected," said Sophie Brochu, President and Chief Executive Officer of Gaz Métro.
"From the beginning, our collective objective was to ensure natural gas consumers were not negatively impacted by an oil project. This Agreement achieves our collective objective on behalf of our customers," said Steve Baker, President of Union Gas.
"It is my belief that the public consultation process undertaken by the governments of Ontario and Québec helped the agreement," said Glenn Beaumont, President of Enbridge Gas. "The agreement enables continued economic development as it provides enough capacity to serve foreseeable needs of natural gas consumers in both provinces."
TransCanada is expected to amend its application for the Eastern Mainline Project, which is before the National Energy Board (NEB) as file OF-Fac-Gas-T211-2014-0102, to reflect the content of the agreement.
Gaz Métro, Enbridge Gas, Union Gas and TransCanada intend to conclude a definitive agreement no later than 30 October 2015.
Edited from various sources by Stephanie Roker