)
The BC government granted environmental certificates
to the Westcoast Connector Gas Transmission pipeline
and the Prince Rupert Gas Transmission pipeline, both
designed to deliver gas from the interior of BC to proposed
coastal LNG facilities. Spectra’s Westcoast Connector
consists of two, 860 km pipelines costing CAN$7.5 billion.
TransCanada’s Prince Rupert line will run 900 km, and cost
an estimated CAN$5 billion.
)
Pembina will spend CAN$210 million in northeast British
Columbia to bolster the Blueberry pipeline system that
carries condensate and natural gas liquids (NGLs) from
the Montney resource play. The expansion is expected to
be onstream by late 2017, and add 75 000 bpd capacity.
In all, Pembina will have a total of 885 000 bpd capacity
delivering crude, condensates and NGLs from the new
Montney, Duvernay and Deep Basin plays in northeast
BC and northwest Alberta to tank farms in the Edmonton
region.
)
Pembina Pipeline is also expanding its recently acquired
Vantage pipeline system. The system consists of
700 km of line that links ethane production in North
Dakota to petrochemical manufacturers in Alberta. The
CAN$85 million expansion will add a new, 80 km, 8 in. line
and boost capacity from 40 000 bpd to almost 70 000 bpd.
Transmission south
From collection terminals in southern Alberta, Canadian crude
moves in several directions. To the south, both Enbridge and
TransCanada deliver almost 3 million bpd of bitumen, sweet
synthetic crude and conventional crude to the US through
various existing networks. The tally has been boosted by the
commissioning of several lines that help deliver crude to the
US Gulf Coast (USGC), home to North America’s largest refinery
complexes. In December, Enbridge’s 600 000 bpd Flanagan
South (running from Illinois), and the twinning of Enterprise
Products Partners’ 450 000 bpd Seaway Crude system to the
Gulf Coast mean that Canadian deliveries have climbed 60%
since mid 2014.
To the west, approximately 300 000 bpd moves to
Vancouver-area terminals. Kinder Morgan is currently in the
process of twinning its Trans Mountain system, and hopes to
increase volumes to 800 000 bpd within the next several years.
Numerous major lines from new sources of natural gas are
also being planned. Northeast British Columbia and northeast
Alberta have an abundance of shale gas, but are uneconomic
to ship to North American markets due to cheaper gas supplies
closer to major urban centres.
LNG projects have therefore emerged as a viable alternative.
EnCana, Apache Canada and EOG Resources received approval
to build the CAN$5.6 billion Kitimat LNG project, capable
of liquefying 1.4 billion ft
3
/d. Royal Dutch Shell, Korea Gas,
Mitsubishi and China National Petroleum Corp are also
contemplating the LNG Canada project, a Kitimat facility that
would convert 1.8 billion ft
3
/d. BG Canada has proposed the
Ridley Island LNG project that would handle 4.2 billion ft
3
/d
in Port Rupert, BC. All in all, the NEB has approved over
14 billion ft
3
/d LNG capacity. As noted, the LNG facilities will be
served by the Westcoast Connector Gas Transmission pipeline
and the Prince Rupert Gas Transmission pipeline, as well as
possibly others.
Problems
Like most sectors in the oil and gas industry, Canada’s pipelines
are beset by a wide range of challenges. In early March, a
pipeline owned by Murphy Oil Company leaked 17 000 bbls of
condensate at the Seal oilfield in north-central Alberta. There
were no injuries, and the condensate was largely confined to
the ROW; since the incident, the company has been working
with the AER to remediate the soil and protect wildlife and
water.
Enbridge was fined CAN$100 000 by the NEB after it failed
to comply with project conditions and requirements. The
incident took place in Manitoba, where the Calgary-based
company failed to implement environmental mitigation while
engaged in maintenance, resulting in damage to wetlands
and agricultural lands. The company was fined a further
CAN$64 000 when it altered construction details of a tank
project in Saskatchewan without the supplemental approval of
the NEB.
Although spills and fines are a concern, environmental
opposition to pipelines ranks far higher on the sector’s radar.
Worldwide, environmentalists and the public are concerned
that the increasing concentration of man-made greenhouse
gases (GHGs) in the atmosphere is leading to gradual warming
of the planet, causing potential harm to flora, fauna and human
habitats.
Canada’s petroleum industry comes under special scrutiny
over oilsands production, which requires the use of energy to
coax the heavy bitumen out of the ground and upgrade it to
higher quality crude. This extra processing is considered ‘dirty
oil’, and various jurisdictions, including California and the EU,
have tried to have it banned.
Environmental non-government organisations (ENGOs) and
other activists have worked to slow the oilsands development
through proxies such as the Keystone XL pipeline. The line,
which would deliver up to 800 000 bpd from Alberta to the
USGC, needs presidential approval to cross the Canada/US
international border; that approval has been held up by the
Obama Administration since 2008.
After Republicans gained control of both the House and
Senate in 2014 elections, various bills were passed to approve
the Keystone XL. In March, President Obama vetoed a Senate
bill, noting that he was awaiting final State Department
assessment. TransCanada has finished work on the southern
section of the Keystone XL portion running from Cushing,
Oklahoma, to the US Gulf Coast. The CAN$2.3 billion section
began deliveries of 300 000 bpd to refineries in early 2014, but
few are optimistic that the entire system will be given the green
light prior to presidential change in 2016.
While the spotlight has largely been on Keystone XL,
other proposed systems have also been delayed. Enbridge
plans to expand its 500 000 bpd Clipper pipeline that ships
crude from Alberta to Wisconsin. The first expansion would
add 120 000 bpd capacity and a second phase would add
16
World Pipelines
/
JUNE 2015
