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Canada pipeline recap – Part 2

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World Pipelines,

Part two of the overview of Canada’s key pipeline projects focuses on recent news relating to Keystone XL, Energy East and Prince Rupert.

Other projects

Keystone XL

The US Department of State decided not to issue a Presidential Permit to construct and operate the US section of the Keystone XL pipeline in November 2015. TransCanada responded by taking legal action against the US under the North American Free Trade Agreement (NAFTA) in January 2016.

The Keystone pipeline has been a key target for environmental protesters due to fears that it would send hundreds of crude oil supertankers down the Atlantic coast.

While rejected by President Obama, the 1197 mile, US$8 billion pipeline project could now be revived by the newly elected Donald Trump. During his election campaign, Trump suggested that he would approve Keystone XL, so long as the US receives a percentage of the profits. He also stated that within his first 100 days of being in office, he will invite TransCanada to renew the currently vetoed permit application to construct the pipeline.

Canada is also on board with the idea of reviving Keystone XL. In light of Trump’s victory, an optimistic TransCanada stated that it was currently “evaluating ways to convince the new administration on the benefits, the jobs and the tax revenues this project brings to the table […] TransCanada remains fully committed to building Keystone XL.”

Energy East

Ten NEB hearings for the Energy East pipeline took place in August. The board heard from intervenors on the Energy East and Eastern Mainline projects, who shared key areas of concern, explained how the project could impact them and asked TransCanada questions about the projects.

On 29 August, the Energy East pipeline hearing in Montreal was cancelled after protesters made their way into the board room, forcing NEB commissioners to leave. The project has faced opposition and criticism from some of the First Nation groups, along with environmentalists.

In September, the NEB issued two decisions with regards to the hearings. The first decision dealt with recusal of the members of the panel. All three members decided to recuse to preserve the integrity of the NEB and the review. The Chair and Vice-Chair also recused from the administrative duties they had in relation to the two applications at issue.

The second decision addressed requests for staff who attended the meetings to be removed, for information about the meetings to be published and for the newly assigned panel to hold an inquiry into the meetings.

These hearings were scheduled to conclude in December 2016, with the NEB expected to submit its report by March 2017.

If approved, the CAN$15.7 billion proposed 4600 km pipeline will transport 1.1 million bpd of oil. The current pipeline is designed to transport liquid natural gas. However, if Energy East goes ahead, this would carry crude oil instead.

The Environment and Climate Change Canada (ECCC) will assess the upstream greenhouse gas emissions associated with this project. Moreover, the NEB and ECCC are working on an enhanced public engagement process for this assessment.

Prince Rupert

TransCanada’s Prince Rupert Gas Transmission project (PRGT) proposes to construct and operate (subject to regulatory and commercial approvals) a 900 km natural gas pipeline that will deliver natural gas from near Hudson's Hope to the proposed Pacific NorthWest LNG facility at Lelu Island, off the coast of Port Edward, near Prince Rupert.

In April, PRGT signed agreements with the Takla Lake First Nation and McLeod Lake Indian Band. This brought the total number of signed project agreements on PRGT to 11.

In November, TransCanada announced that PRGT also signed a project agreement with 12 hereditary chiefs of the Gitxsan Nation.

The CAN$5 billion PRGT is expected to provide significant economic benefits for British Columbians, local and provincial governments, and Aboriginal communities as it supports the export of surplus natural gas to global markets.

In September, the NEB granted an extension of the sunset clause for the North Montney pipeline project. Construction of this pipeline, which would tie into the proposed PRGT, must commence before 10 June 2017.

NGTL system

On 31 March 2015, NOVA Gas Transmission Ltd.’s (NGTL) applied to the NEB for the construction and operation of approximately 230 km of a pipeline in five pipeline section loops and two compressor station unit additions in northern Alberta, mostly adjacent to existing sites. The estimated total cost of the project is CAN$1.29 billion.

In June, an NEB report recommend that the federal government approved NGTL proposed expansion to its existing system in northern Alberta. It listed 48 conditions that NGTL would have to meet should the project go ahead.

On 31 October, the Canadian government approved NGTL’s natural gas gathering pipeline, with 36 binding conditions that were set by the NEB.

NGTL estimated that the project would generate CAN$800 million in labour income during construction, and CAN$1.2 billion in gross domestic product in Canada.

The pipeline will produce approximately 3000 jobs and support Canada’s economic growth. The project is expected to be completed by 2Q18.

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