Copyright of the Daily Oil Bulletin 2018
NGTL Raises Concerns About Westcoast’s Proposed Spruce Ridge Program
The National Energy Board (NEB) should not approve Westcoast Energy Inc.’s proposed $564.5 million Spruce Ridge program in northeast British Columbia until the Enbridge Inc.-owned company has resolved its “significant” concerns, says NOVA Gas Transmission Ltd.
The proposed placement of the Westcoast Aitken Creek loop right-of-way between d-31-I, 94-B-16 to d-36-I, 94-B-16, would be directly over top the approved footprint (temporary workspace) reserved for the construction of a portion of the North Montney Mainline (NMML) Kahta section, NGTL said in a letter to the board.
The ROW and workspace for the North Montney Mainline were earlier approved by the NEB. NGTL said it objects to Westcoast’s proposed alignment for the Aitken Creek loop where it overlaps with approximately four kilometres of the approved NMML corridor. “The routing proposed by Westcoast would significantly impede NGTL’s ability to construct the portion of the NMML,” said the company.
NGTL said that upon becoming aware of the conflict it met with Westcoast to discuss the matter and it will continue to work with the company to resolve the matter.
An NEB hearing on a variance to the North Montney Mainline approval to provide northeast B.C. gas producers with access to export markets through the TransCanada Corporation system will begin Jan. 22, 2018 in Calgary (DOB, Jan. 2, 2018).
Westcoast has applied for approval to construct and operate expansion facilities in Zone 3 (Transmission North) of its pipeline system with a planned in-service date of August 2019. The proposed Spruce Ridge project near Chetwynd and Wonowon will enable it to provide incremental firm transportation service from receipt points along the Fort Nelson Mainline, Aitken Creek Pipeline and Fort St. John Mainline.
The company said it received requests for additional Zone 3 firm transportation service in order to accommodate increasing levels of production from the Montney formation in the area. Following a binding open season in 2016, Westcoast entered into expansion service agreements with shippers for 402 mmcf per day of incremental firm service with a weighted average term of approximately 24 years.
The Spruce Ridge program consists of two residue natural gas pipeline loops, the Chetwynd and Aitken Creek loops.
The Chetwynd loop consists of roughly 25 kilometres of 36-inch outside diameter pipe looping the existing Fort St. John Mainline from approximately 17 kilometres southwest of Chetwynd to about 6.5 kilometres northeast of the town. The Aitken Creek loop is comprised of approximately 13 kilometres of 24-inch pipe, looping the existing 12-inch Aitken Creek connector and the 16-inch Aitken Creek loop from the existing Aitken Creek plant to just west of the existing Highway gas plant.
Compressor Stations N5 and 2 each will get an additional compressor and there will be minor modifications at Compressor Stations N5 and 16.
There also will be an increase in the maximum operating pressure for a portion of the existing Fort St. John Mainline.
Rolled in tolls
In its application, Westcoast said it has notified third party shippers about the project and there are outstanding concerns about its impact on tolls, tariffs, access or service. The company said that at the Sept. 21, 2017 Toll and Task Force meeting, the majority of members voted in support of a resolution for the cost of the project to be included in the Zone 3 cost of service and tolled on a rolled-in basis.
While one or more task force members opposed the resolution, they did not intend to actively oppose it or propose an alternative to the NEB, said Westcoast.
Concerns were expressed with the anticipated toll increase associated with the project and the cumulative toll increases on T-North as a result of a number of expansion projects that Westcoast has undertaken over the last several years, it said. Based on an estimate project cost of $564.5 million, Westcoast estimates the toll impact will be two cents/mcf from a base toll of 15.9 cents/mcf.
In 2014, prior to the recent expansions, the T-North toll was 14 cents/mcf, Westcoast noted.