Spectra Energy, BG proposal must overcome tough geology
Route to Prince Rupert ruled out by Enbridge, Kitimat developers
Spectra Energy Corp. is teaming up with BG Group plc to build a pipeline to feed a proposed LNG export facility, bringing to three the number of new pipes planned to ferry natural gas from the northeast corner of British Columbia to the Pacific coast for export.
The 850-kilometer, large diameter pipeline proposed by Spectra remains highly conceptual, Nathan VanderKlippe points out at the Globe and Mail.
As currently proposed, the project, which would feed an as-yet undefined export development proposed by BG, is also massive. In a statement, Spectra said the pipe, if built, could shuttle up to 4.2 billion cubic feet of natural gas per day to a potential export facility at Prince Rupert, B.C.
BG has optioned a 200-acre site owned by the Prince Rupert Port Authority and is said to be studying the potential for a West Coast export facility. Petronas, Malaysia’s state-run oil and natural gas company, is also eyeing an export facility close by, following its bid for Calgary-based Progress Energy Resources Corp. this summer.
“This suggests that Sepctra/BG’s pipeline is well positioned to serve that facility too, although it is unclear how the competitive dynamics would play out,” Paul Lechem, an analyst at CIBC World Markets Inc., said today in a note to clients.
The proposed route to Prince Rupert is fraught with difficulty. Enbridge Inc. long ago ruled it out as a possible pathway for its hotly contested Northern Gateway pipeline.
So, too, did developers of the Kitimat LNG project. Pacific Northern Gas Ltd. currently operates a small diameter natural gas line that follows the Skeena River; it’s not clear there is room for additional capacity.
Spectra has not selected a right of way, but the route along the Skeena is “so geologically active it’ll take the big pipe out on a regular basis,” Alfred Sorensen, chief executive of Canadian Spirit Resources Inc. and former head of Galveston LNG, which sold the Kitimat scheme to Apache Corp. and EOG Resources, said in a recent interview. “It’ll be impossible to build a 36-inch pipeline either under or through the Skeena,” he predicted.