Read this report from Reuters on Royal Dutch Shell Plc’s plan to hire TransCanada Corp to build a new pipeline from Northeast BC to Kitimat to supply natural gas to Shell’s proposed liquid natural gas plant there. (June 5, 2012)
CALGARY, Alberta, June 5 (Reuters) – TransCanada Corp will build a C$4 billion ($3.8 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-kilometer (434-mile) line capable of shipping 1.7 billion cubic feet of gas per day from Dawson Creek in northeast British Columbia 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 British Columbia’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. Currently in regulatory hearings, Northern Gateway faces strong opposition from environmental groups and many of the aboriginal communities along its planned route.
That opposition has already added more than a year to regulatory hearings, a delay that encouraged the Canadian 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 aboriginal 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.”