Page 9 - NorthAmOil Week 45 2021

NorthAmOil POLICY NorthAmOil

Biden administration denies

considering Line 5 shutdown

NORTH AMERICA THE administration of US President Joe Biden arbitration between the two sides failed, Cana-
has denied reports that it has been considering da’s federal government stepped in, invoking a
shutting down Enbridge’s Line 5 pipeline, which dispute resolution provision of a 1977 treaty with
is at the centre of a dispute with the State of the US.
Michigan. A move by Biden to halt the pipeline would
Reports had emerged that the Biden admin- not be entirely without precedent, given that one
istration was quietly studying the impact of of his first actions on taking office in January was
shutting down Line 5. However, a White House to revoke a permit for the Keystone XL oil pipe-
Michigan Governor spokeswoman, Karine Jean-Pierre, told report- line from Canada, effectively killing the project.
Gretchen Whitmer’s ers on November 8 that the idea was “inaccu- However, Line 5 is already built, and has been in
opposition to Line rate”. Instead, the White House is awaiting the service for around 68 years.
5 centres on the findings of a study by the US Army Corps of Additionally, prices for oil and petroleum
underwater section of Engineers into a new tunnel that would house products are rising in the US, and there are con-
the pipeline. the underwater portion of Line 5 before decid- cerns over the impact that any loss of pipeline
ing whether to wade into the debate over the capacity would have. Indeed, the reports that the
pipeline’s future. Biden administration was considering shutting
The dispute over Line 5 has been ongoing down Line 5 prompted angry reactions from
for around a year. Enbridge is seeking to replace Republican lawmakers against the backdrop of
the underwater section of the pipeline that runs spiking prices.
through the Straits of Mackinac, housing it in However, any position or additional action
the proposed tunnel. But Michigan Governor that the US will be taking will be informed by the
Gretchen Whitmer has issued an order to have findings of the Army Corps review, according to
the pipeline shut down altogether, citing con- Jean-Pierre. The review is currently in its prelim-
cerns over its safety. Enbridge has defied Whit- inary phase and is expected to take around two
mer’s order thus far, and after court-ordered years to complete.™

PROJECTS & COMPANIES

ARC strikes deal to supply gas to LNG Canada

BRITISH ARC Resources said last week that it had struck as the US Gulf Coast. The plant’s location will
COLUMBIA a deal to supply natural gas to a member of the enable shorter sailing times as well as allowing
LNG Canada consortium, which is building an tankers to bypass the Panama Canal, where con-
LNG export terminal on the British Columbia gestion led to delays in LNG shipments to Asia
coast. last winter.
The agreement is set to take effect when LNG ARC is the largest producer in the Montney
Canada enters service – expected in 2025 – and shale gas play, which spans Alberta and BC. The
will see ARC supply 150mn cubic feet (4.2mn company’s total production reached 353,657
cubic metres) per day of gas over the long term barrels of oil equivalent per day (boepd) on aver-
to be used as feedstock for the terminal. The gas age during the third quarter of 2021, with natu-
will come from ARC’s Sunrise facility, the com- ral gas accounting for 61% of this. Its gas output
pany said. It did not specify which consortium nearly doubled year on year to 1.3bn cubic feet
member the agreement was with. (36.8 mcm) per day in the third quarter, largely
Development of LNG Canada is being led by as a result of its merger with Seven Generations
Royal Dutch Shell, which operates the project Energy earlier this year.
with a 40% interest. The other participants in the Sunrise produced an estimated 286 mmcf
consortium are Malaysia’s Petronas, with a 25% (8.1 mcm) per day in the third quarter, but
stake, PetroChina and Japan’s Mitsubishi with ARC noted that it was planning to invest
15% each and Korea Gas (KOGAS) with 5%. CAD115mn ($92.5mn) into an expansion of
The project is being built to take advantage of the facility in 2022. This is anticipated to add
close proximity to Asia in comparison with other 80 mmcf (2.3 mcm) per day of gas production
LNG-producing regions in North America, such and processing capacity.™

Week 45 11•November•2021 www. NEWSBASE .com P9