New BC Gas Pipeline Planned

New York-listed Spectra Energy (NYSE:SE) and BG Group (LSE:BG) have announced plans to collaborate on a new natural gas pipeline that would run across northern BC and terminate in Prince Rupert.

According to a news release issued Monday afternoon, the 850-kilometer pipeline would begin in the gas fields in the province’s northeast and terminate at a potential LNG export terminal in Prince Rupert, where the gas would be shipped via tanker to Asia.

The pipe would have a capacity of 4.2 billion cubic feet per day and would connect with Spectra’s gas hub southwest of Fort St. John.

“This project offers B.C. a unique opportunity to access new markets, strengthen its energy infrastructure, engage stakeholders in economic growth and job creation, and ultimately secure the province’s position as a competitive energy leader,” Spectra president and CEO Greg Ebel said in a statement.

“We are ideally positioned to create further value for our investors by leveraging surplus B.C. natural gas supplies and facilitating its export to high-demand markets in Asia,” he added.

Houston-based Spectra already ships 60 percent of BC’s natural gas. Despite weak natural gas prices, there are several LNG terminals planned for BC’s West Coast designed to take advantage of gas demand from Asia, where prices are higher.

These include:

• Malaysia’s Petronas which in June paid $6 billion for Progress Energy and is planning on building an LNG facility in Prince Rupert;
• Royal Dutch Shell’s plan to construct an LNG plant in Kitimat with three Asian partners;
• A plan by Encana Corp, Apache Corp and EOG Resources to start up an LNG facility in Kitimat by 2015;
• BC LNG, a proposal by the Hasla First Nation and LNG Partners, another American company, to ship gas by 2014.