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LNG exports a key area of focus for Enbridge

Enbridge Inc.

Enbridge Inc. is looking beyond its British Columbia natural gas system to step-out projects in Western Canada and a key area of focus is LNG exports through its Westcoast Connector Gas Transmission project which has a developed route to Prince Rupert, analysts heard Tuesday.

“It’s scaleable [and] it’s a cost effective option for any of the next-phase LNG export projects that are being discussed,” Bill Yardley, president and executive vice-president, told the company’s investor day. The proof of concept is that Enbridge has signed an exclusivity agreement with a “significant LNG proponent” who will negotiate only with the company until mid-2019 for gas transportation to the West Coast, he said.

Enbridge also is open to LNG terminal investments, Yardley added.

Spectra Energy Corp., which Enbridge acquired in 2017, had done considerable work on the project, he said. The company had partnered with BG Group to build the Westcoast Connector to transport gas 860 kilometres from northeast B.C. to an LNG export facility at Ridley Island near Prince Rupert.

In 2014, Spectra received its environmental certificate for the construction and operation of up to two 48-inch pipelines with a capacity of 8.4 bcf/d from the Cypress area in northeast B.C. (100 kilometres northwest of Fort St. John) to the export terminal (DOB, Nov. 26. 2014).

A division of Royal Duch Shell plc stopped work on the Prince Rupert LNG project after the company acquired BG Group in 2016.

In addition to LNG, Enbridge is exploring the development of natural gas liquids (NGL) infrastructure in Western Canada so that its pipeline customers can fully monetize the liquids entrained in the gas pipeline streams on the B.C. pipeline system, said Yardley. “Clearly, that would be a win-win situation.”

In Western Canada, Enbridge has invested nearly $2 billion over the past five years in demand-pull and supply-push on T-North and T-South on its B.C. pipeline, building a strong platform for opportunities going forward, he said. “The Montney and the Duvernay basins in Western Canada are world class, having both size and scale and the low cost to develop and produce versus other North American basins,” said Yardley.

With a successful open season, Enbridge would expand its T-North system by 2023 and expects to secure an additional expansion of T-South early in the next decade if demand for downstream service continues, he said. “The outlook for B.C. Pipeline is quite strong.”

Enbridge this year placed $6 billion in projects into service, including NEXUS which transports 1.5 bcf/d to customers in Ohio, Michigan and Ontario (Dawn).

In Western Canada, demand to the south and Pacific Northwest is very strong while LNG exports are gaining traction there and Enbridge is well situated to participate through its existing assets and its West Coast Connector export pipeline project, said Yardley.