Spectra Energy has joined the race to export Canada’s natural gas riches with plans to develop a multibillion-dollar pipeline to a proposed export facility near British Columbia’s Pacific coast, the company announced Monday.
$6 billion to $8 billion
Houston-based Spectra said it has signed an agreement with the British energy corporation BG Group to develop a $6 billion to $8 billion system connecting prolific shale gas regions in northeastern British Columbia to the coast. The 525-mile pipeline would move natural gas to an export station that BG plans to build in Prince Rupert, B.C.
The project is the latest in a string of corporate plans to liquefy low-cost natural gas from Canada’s unconventional basins and ship it to energy-starved Asian markets, where it’s more expensive.
“The size of the resource in northeast British Columbia is as big as any of the unconventional plays anywhere in North America,” said Gary Weilinger, Spectra’s vice president of strategic development and external relations. “For the province to reach its potential, we need more markets.”
BG a co-owner
Spectra and BG would co-own the system, which would move up to 4.2 billion cubic feet of BG gas per day.
Provided the partners move forward as expected and receive regulatory approval, the system would be operational in 2019, Spectra officials said.
The line would connect with Spectra’s existing pipeline networks in the Montney and Horn River natural gas fields in British Columbia.
A surge in natural gas production from shale and other unconventional formations across North America has made gas cheap in Canadian and U.S. markets, leading some producers to pull out of natural gas fields.
However, Spectra’s plan and other projects to ship gas overseas could revive Canadian production, said Carl Kirst, an equity analyst for BMO Capital Markets.
In June, Shell announced that it would partner with pipeline company TransCanada to carry natural gas across British Columbia and export it.
“Now we have two large LNG projects that look like they are slowly moving forward,” Kirst said. “Together, the advancement of the LNG export scenario should help put a light at the end of the tunnel for West Canadian gas.”