2019 Canadian Natural Gas Pipeline Report: Seeking Regulatory Clarity

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The Canadian oil and gas pipeline industry has faced increased regulatory uncertainty over the past few years. The Canadian Energy Pipeline Association (CEPA) called the potential for new major pipeline development in Canada “bleak” in the wake of the Senate’s passing of Bill C-69, which the association described as “a serious impediment to the future of the industry” in a June 21 statement.

Since its introduction in February 2018, CEPA members have argued that Bill C-69 does not create the clarity and certainty necessary for proponents of major new pipeline projects to risk bringing them forward.

“The Senate’s package of amendments would have improved the bill,” says Chris Bloomer, president and CEO of CEPA. “The government’s amendments do not go far enough to make it workable.”

With one of the top oil and gas reserves in the world, CEPA argues that further developing Canadian pipeline infrastructure to meet global demand would positively impact Canadian and global emissions profiles and provide enormous benefits to the Canadian economy.

“We desperately need more investment,” Bloomer says. “We will need new projects. However, Canada is sending mixed messages that will send critical investment capital elsewhere.”
Despite these challenges, demand is still high for natural gas capacity throughout Canada. What follows is an overview of some of the major natural gas pipeline projects currently under way or in the permitting process.

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Coastal GasLink Pipeline Project

Location: British Columbia

Stakeholder(s): TC Energy (formerly TransCanada Corp.), Shell Canada Ltd., LNG Canada
Overview: Announced in June 2012, Coastal GasLink Pipeline Ltd. proposes to build an approximately 670-km pipeline from the Dawson Creek area to the British Columbia coastline. The pipeline will transport natural gas to the proposed LNG Canada facility near Kitimat. The project would involve construction of a 48-in. diameter pipeline, in addition to the construction and operation of up to three meter stations and one compressor station. The initial capacity would be between 2 billion cubic feet per day (Bcf/d) and 3 Bcf/d. On June 14, the BC Supreme Court concluded a three-day hearing on Coastal GasLink’s application asking the court to continue the previously granted injunction. On July 3, Coastal GasLink announced it would be undertaking controlled blasting activities along the project right-of-way as construction activities have begun east of Kitimat. The project is expected to be in service in 2021.

Duvernay II Project

Location: Alberta

Stakeholder(s): NGTL, TC Energy

Overview: In February 2018, TC Energy announced plans to further expand its NGTL pipeline system. The company completed a large expansion of the same system in 2017. Now, TC Energy is exploring options to add approximately 350 km of new 48-in. pipe to the NGTL system in northwestern Alberta to help producers in the Western Canadian Sedimentary Basin (WCSB) get natural gas to market. These various pipeline sections within the study area would be located starting in Grande Prairie County, extending through the Municipal District of Greenview No. 16, Yellowhead County and ending in Clearwater County. Multiple pipeline sections would run parallel to the existing system and connect at each end to adjacent existing pipelines. The routes the company is investigating would be in three key areas: Grande Prairie West Area, Grande Prairie South Area and Edson South Area. TC Energy expects regulatory approval to come in the second quarter 2020, with an estimated in-service date a year later.

NGTL System Expansion Project (2021)

Location: Alberta

Stakeholder(s): NGTL, TC Energy

Overview: In February 2018, TC Energy announced plans to further expand its NGTL pipeline system. The company completed a large expansion of the same system in 2017. Now, TC Energy is exploring options to add approximately 350 km of new 48-in. pipe to the NGTL system in northwestern Alberta to help producers in the Western Canadian Sedimentary Basin (WCSB) get natural gas to market. These various pipeline sections within the study area would be located starting in Grande Prairie County, extending through the Municipal District of Greenview No. 16, Yellowhead County and ending in Clearwater County. Multiple pipeline sections would run parallel to the existing system and connect at each end to adjacent existing pipelines. The routes the company is investigating would be in three key areas: Grande Prairie West Area, Grande Prairie South Area and Edson South Area. TC Energy expects regulatory approval to come in the second quarter 2020, with an estimated in-service date a year later.

North Montney Mainline Project

Location: British Columbia

Stakeholder(s): NGTL, TC Energy

Overview: Located in Peace River Regional District of northeast British Columbia, the $1.4 billion North Montney Mainline (NMML) project includes a 301-km, 42-in. diameter pipeline and will also include metering facilities, valve sites and compression facilities. The project is backed by 20-year commercial contracts with 11 shippers to transport approximately 1.5 Bcf/d of natural gas. In May, the NEB recommended the approval of variance applied for in March 2017. TC Energy began construction in August 2018, and facilities will be phased into service over a two-year period, beginning in September 2019.

Peace Pipeline Phase VIII Expansion

Location: Alberta

Stakeholder(s): Pembina

Overview: Pembina Pipeline Corp. announced Jan. 31 that it has approved the Phase VIII expansion of its Peace Pipeline system, which will accommodate incremental customer demand in the Montney area by debottlenecking constraints, accessing downstream capacity, and further enhancing product segregation on the system. Phase VIII will include new 10- and 16-in. pipelines in the Gordondale to La Glace corridor of Alberta, as well as six new pump stations or terminal upgrades located between Gordondale and Fox Creek, Alberta. The project will enable segregated pipeline service for ethane-plus and propane-plus NGL mix from the central Montney area at Gordondale into the Edmonton area for market delivery. Phase VIII has an estimated capital cost of approximately $500 million and is supported by 10-year contracts with significant take-or-pay provisions. Phase VIII is anticipated to be placed into service in stages starting in 2020 through the first half of 2022, subject to regulatory and environmental approvals.

West Path Delivery Project

Location: Alberta

Stakeholder(s): NGTL, TC Energy PipeLines Ltd.

Overview: NGLT is proposing to build, own and operate a 21.5 km, 42-in. pipeline, two compressor stations and related facilities to supply southwestern Alberta and connected downstream markets with natural gas produced in Western Canada. The proposed route of the Western Alberta System Mainline Loop (Rocky View section) runs parallel to an existing pipeline utility corridor for 6 km through Cochrane, Alberta, and continues south through Rocky View County for another 15 km, where it would also parallel existing infrastructure where possible to minimize environmental impact. The company filed an application with the NEB in February and anticipates construction starting in June 2019. The estimated completion and in-service date is June 2020.

This is not a comprehensive list of the pipeline projects for the upcoming construction season. For updates regarding ongoing projects, refer to the Project Roundup on page 16 and published each issue.

North American Oil & Pipelines will provide a report on U.S. gas pipeline projects in the November/December issue. The Canadian and U.S. oil pipeline reports were published in the February and May issues, respectively.

Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com.

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