A new gas pipeline from Ohio to Ontario will make it easier to get gas to central Canada, but could spell more trouble for the main east-west pipeline in Canada. Enbridge Inc. and Spectra Energy Corp announced the execution of a Memorandum of Understanding (MOU) on September 4 to jointly develop the NEXUS Gas Transmission (NGT) system. It will be fed by burgeoning supplies of US shale gas, and quite likely provide attractive supply options for Ontario consumers. This will likely reduce demand on the main gas pipeline that runs from Western Canada into Ontario. That pipeline has been laboring with reduced volumes in recent years, to the extent that a major rate hearing now underway is looking into the issue.
As noted by Nathan Vanderklippe in the Globe and Mail, “Nexus would carry about a billion cubic feet of gas daily to a hub near Detroit, where the gas can feed both Michigan producers and the Vector pipeline, which has served as a major conduit for Western Canadian gas to reach central markets. ... [I]t’s clear most of the Ohio energy carried by Nexus will be destined for Canada.”
An open season for the project is planned for fourth quarter 2012, with a targeted in-service as early as November 2015, depending on final market demand and commitments. “It’s clear that the dynamics for Eastern Canada have been changing,” said Kevin Petak, Vice-President of gas modeling with ICF International. “Certainly, it seems all things point to the fact that supply for Eastern Canada is likely to originate from different spots than it has traditionally originated from.”
See “TCPL’s Mainline tolls to be studied at NEB hearing,” IPPSO FACTO, April 2012.