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NorthAmOil COMMENTARY NorthAmOil
TC Energy prepares to send more gas to Eastern Canada
Pipeline operator TC Energy will soon sell more Western Canadian gas to the country’s eastern provinces, writes Anna Kachkova
CANADA
WHAT:
TC Energy’s agreements with gas retailers in Eastern Canada have been approved.
WHY:
The company will ship extra gas via pipeline capacity it previously intended to use for its abandoned Energy East project.
WHAT NEXT:
The plan makes it even more unlikely that Energy East could ever be revived.
MORE cheap natural gas from Western Can- ada is set to reach the country’s eastern prov- inces under a plan put forward by TC Energy – formerly TransCanada – that has now been approved by federal regulators. e Canadian National Energy Board (NEB) has approved TC Energy’s agreements with Eastern Canadian gas retailers that include Irving Oil and Enbridge GasNewBrunswick.
Under the plan, the gas will be shipped through TC Energy’s Mainline, via capacity that the operator previously planned to use for its abandoned Energy East oil pipeline. e ambi- tious CAD15.7bn ($11.9bn) Energy East project would have carried 1.1mn barrels per day (bpd) from Alberta and Saskatchewan to refineries and a marine terminal in New Brunswick. is would have opened up access to European mar- kets – and those further afield – for Western Canadian oil. e plan involved converting an existing natural gas pipeline to carry crude as far as eastern Ontario, with new pipeline capacity being added to Quebec and New Brunswick. e pipeline would have covered a total distance of 2,860 miles (4,600km).
However, the project was proposed at a time when new Canadian oil pipeline appli- cations were encountering major regulatory delays, and Energy East’s fate was no di erent.
TransCanada’s application for Energy East, at over 30,000 pages, was one of the most exten- sive regulatory applications ever compiled by the company, and would have been subject to a reg- ulatory approval process of at least 18 months. But the NEB subsequently said its regulatory review would now consider indirect greenhouse gas (GHG) emissions, making the approval pro- cessmorelengthyanddi cult.Asaresult,Tran- sCanada suspended its application for Energy East for 30 days in September 2017. e plan was then scrapped altogether in October of that year, with the company citing the “substantial uncer- tainty” surrounding the scope, cost and timing of the NEB’s review.
Now TransCanada’s successor, TC Energy, is turning its attention back to gas.
Going for gas
e buyers of TC Energy’s gas are optimistic that the plan will result in considerable savings. “It should provide some signi cant savings, in the order of 20-40% cheaper, on the molecule side for customers starting in 2021,” Enbridge Gas New Brunswick’s general manager, Gilles Volpé, told CBC News.
e new source of supply will be welcomed by New Brunswick gas distributors, as it will replace lost gas from o shore Nova Scotia, where the
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w w w . N E W S B A S E . c o m Week 30 01•August•2019