TransCanada Applies For West-East Gas Shipment Clearance

TransCanada has applied with the National Energy Board of Canada for permission to start transporting natural gas from the west of the country to New Brunswick in the east, using existing pipeline infrastructure, CBC reports, adding the company has won the support of Enbridge and Irving Oil, the two largest gas retailers in New Brunswick.

According to the general manager of Enbridge, Gilles Volpe, the move could cut consumers' gas bills by as much as 30-40 percent. The plan, Volpes said, " gives access to more capacity, and more access to the Alberta-based natural gas. That natural gas is plentiful, of course, but it's also very stable from a price point of view."

Enbridge has already signed a contract for the deliveries of natural gas from Alberta to the East for 20.5 years beginning in 2021. Irving Oil has also signed a contract, with deliveries beginning this November.

"EGNB [Enbridge Gas New Brunswick] does not have access to local supply, nor local natural gas storage facilities to meet its franchise needs at this time and considers [gas from the west] as a valuable asset in meeting the needs of Atlantic Canada long term," said Volpe.

Previously, New Brunswick got its gas from offshore fields in Nova Scotia, but production there was shut down last year, leaving Alberta as the natural replacement for supplies of the fuel.

TransCanada's idea to use existing pipelines to ship gas from the West to the East comes after the company dropped its plans for the Energy East pipeline that would have shipped Alberta crude oil to the east.

The company cited regulatory tightening as reason for its decision to give up Energy East. Environmentalist opposition to any new pipeline projects also helped tip the scales against Energy East. But the decision has opened up spare capacity that could be used to transport gas and keep its price low enough to make it competitive.

By Irina Slav for Oilprice.com

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