Little opposition expected to planned $ 4- billion gas pipeline
Transcanada says native groups have a stake in the proposed scheme
I don’t think it will get the same sort of resistance [ as Northern Gateway faces] ... it’s starting from square one and subject to the accelerated regulatory review. CHAD FRIESS UBS SECURITIES ANALYST
CALGARY — TransCanada Corp will build a $ 4- billion pipeline to serve Royal Dutch Shell PLC’s planned liquefied natural gas plant on British Columbia’s northern coast, the company said on Tuesday.
TransCanada, Canada’s No. 1 pipeline company, said it would design and build a 700- kilometre line capable of shipping 1.7 billion cubic feet of gas per day from the Dawson Creek area to Kitimat, where three LNG plants, including Shell’s facility, are planned.
Northeastern British Columbia contains some of the world’s largest unconventional natural gas reserves.
The Montney and Horn River shale gas deposits alone contain trillions of cubic feet of gas.
However the U. S. market is glutted with its own shale gas production, and B. C.’ s producers have pinned their hopes on LNG exports to tap lucrative Asian markets.
TransCanada said in a statement that it expected to complete the line by the end of the decade, pending regulatory and corporate approvals.
The line will run near Enbridge Inc.’ s Northern Gateway oil pipeline project, which will also end at Kitimat. In regulatory hearings, Northern Gateway faces strong opposition from environmental groups and many of the first nations communities along its planned route.
That opposition has already added more than a year to regulatory hearings, a delay that encouraged the federal government to put in new rules capping the length of such sessions.
However, TransCanada’s pipeline is expected to get an easier ride.
With little risk of sustained environmental damage from a rupture, natural gas pipelines have not faced the same opposition as oil lines. Also, some first nation communities, such as the Haisla who live near Kitimat, have a stake in LNG projects.
“I don’t think it will get the same sort of resistance [ as Northern Gateway faces],” said UBS Securities analyst Chad Friess.
“In addition, it’s starting from square one and subject to the accelerated regulatory review that the Canadian government has put out there.”
The line will serve the LNG export facility planned by and partners Korea Gas Corp., Mitsubishi Corp. and PetroChina Co. Ltd. The partners are considering a plant that would initially include two units with capacity of 6 million tonnes each annually, or a total of 2 billion cubic feet a day. The plant could be in service by 2020.
Two other proposals have already received LNG export licenses from Canadian regulators. Kitimat LNG is backed by Apache Corp., Encana Corp., and EOG Resources Inc., while the BC LNG Export Co- operative is made up of the Haisla First Nation, Houston- based LNG Partners and natural gas producers.
TransCanada shares were up 0.8 per cent at $ 42.50 in midday trading on the Toronto Stock Exchange.