Canada Regulator OKs Pipeline Expansion

CALGARY -- The Canadian energy regulator said it had approved a C$190 million ($122 million) expansion of the pipeline that ships natural gas to the US Northeast from Nova Scotia, but suspended the go-ahead date because the new gas volumes are still uncertain.

Maritimes and Northeast Pipeline applied to the National Energy Board for a 400 million cubic feet a day expansion after striking a deal with EnCana Corp. to accommodate volumes from its roposed Deep Panuke development off the Nova Scotia coast.

EnCana, North America's top independent oil explorer and producer, said last month it no longer believed the C$1.1 billion project will start up by the 2005 target date, blaming regulatory delays.

The NEB said it did not give an immediate green light because EnCana, in its deal with the pipeline, has the right to cut the expected contract volume by as much as 200 million cubic feet a day until July.

It also cited proposals to supply gas to the Atlantic Canada market.

The board said the approval would take effect July 31, 2003, or if Maritimes & Northeast files new engineering plans to accommodate lower gas volumes.

"The condition was added in case revisions to the applied-for facilities are required as a result of proposed domestic deliveries or if EnCana exercises its one-time right to decrease its contract volumes for some other reason," the NEB said.

The pipeline, which now carries gas supply from the Sable Offshore Energy Project, is owned by Duke Energy Corp., Exxon Mobil Corp. and Emera Inc.

The board held a hearing into the matter in late September and early October in Saint John, New Brunswick.

Source: PowerMarketers.com