Enbridge expects consolidation among British Columbia’s array of LNG proposals will give it a chance to join the midstream business in British Columbia’s LNG world, even though it trails rival TransCanada.
“We all know about the LNG opportunities (on the Pacific Coast), but it’s going to take a lot of infrastructure, particularly (in moving natural gas out of) northeast B.C.,” company Chief Executive Officer Al Monaco told an investor conference earlier in October.
Even so, he said the “conventional wisdom” is that only one or two of the dozen projects now in various stages of planning will go forward, adding: “That’s the most likely scenario.”
Monaco suggested that one pipeline delivering gas to the coast “makes the most sense. We’re just in very preliminary stages of thinking that through and speaking to producers in northern British Columbia,” although not in a position to talk about specific projects.
Mark Maki, acting president of gas pipelines, said the midstream footprint in British Columbia and Alberta will “hopefully” leverage Enbridge’s ability to contribute to LNG infrastructure.
Industry solution
Doug Krenz, senior vice president, natural gas commercial and business development, said the company is pursuing an industry solution to work with producers in the export of LNG, bolstered by its view that consolidation will eventually be needed in the sector.
While conceding that TransCanada has signed two commercial arrangements — with Royal Dutch Shell and Spectra Energy — to build two pipeline links costing C$6.5 billion (US$6.3 billion) to serve the Pacific Northwest project, operated by Progress Energy Canada, a unit of Petronas, he said “there’s a lot more to come on LNG.”
Krenz said TransCanada, through its gas-gathering Nova unit, “obviously has the ability to aggregate natural gas supplies to serve (the Pacific Northwest) pipelines.”
“There’s a lot of confidential information between them and the sponsor of the project that we aren’t aware of and we expect that TransCanada was pretty aggressive on their pricing,” he said.
But Krenz noted that the complexities associated with LNG projects, including market arrangements and hiring a labor force for pipeline construction, has seen “some of the timeframes starting to slide” in British Columbia.
Maki said he does not believe delays in obtaining approvals for Enbridge’s Northern Gateway crude bitumen pipeline across British Columbia have inhibited the company’s ability to obtain an LNG project.
He was adamant that the “polarized” views around Northern Gateway stem more from opposition to oil sands pipelines than Enbridge’s reputation.
“It’s a different environment as it relates to LNG,” he said. “Our research and the initial discussions we’ve had indicate that we should be able to be a part of an (LNG) gas pipeline.”
—Gary Park
