Wider gas line gets green light

B.C.’s environmental assessment office okayed a wider-diameter pipe for the proposed Pacific Trails Pipeline.

B.C.’s environmental assessment office okayed a wider-diameter pipe for the proposed Pacific Trails Pipeline.

Apache Canada plans to build the natural gas pipeline with 42-inch, rather than the 36-inch pipe originally proposed.

The wider pipe allows a 36-per cent increase in capacity, although the flow rate will remain unchanged.

The Pacific Trails pipeline and liquefaction plant was first approved in 2008, when the project was owned by Pacific Northern Gas and designed to import natural gas to B.C.

The 466-km, underground pipeline will tap into an existing natural gas line near Prince George and carry the gas to a liquefaction plant in Kitimat.

Even before shale gas discoveries in northeast B.C. convinced Apache Canada and its partners EOG Resources (formerly Enron) and Encana to buy Pacific Trails and turn it into an export project, it was clear amendments to the original certificate were needed.

Engineers determined a wider pipe would eliminate the need for a mid-way compressor station in Burns Lake.

A separate proposal to shift the proposed route of the pipeline is still under review.

In a decision note signed April 4, Derek Sturko, associate deputy minister and executive director of B.C. EAO, said the office is satisfied that the pipe diameter poses no significant adverse effects.

The decision note also said the EAO believes the amendment does not impact aboriginal rights or treaty rights.

However, the Office of the Wet’suwet’en wrote the ministers with strong concerns about the impact to their rights.

In their most recent letter, Wet’suwet’en natural resources manager David deWit wrote, “We have invested considerable time and resources in the BC EAO review only to find that the level of detail required pre-certification leaves far too many unanswered questions critical for ensuring environmental effects and identification of potential infringements to our Title and associated rights from the project are avoided or minimized.”

Pacific Trails is the furthest ahead of six proposals to bring shale gas from northeast B.C. to plants on the coast, to be liquefied and shipped to Asia.

So far, the project has passed B.C. and federal environmental assessments, signed an equity deal worth up to $570 million with First Nations along the right-of-way, and secured a 20-year National Energy Board lease to export LNG.

But investors in the Pacific Trails project must consider several economic factors before giving the project final approval.

Another factor is a fully-costed engineering report expected from KBR Engineering later this year.

The current estimated cost of the pipeline is $1 billion, and the Kitimat liquefaction plant is $4.5 billion.

Finally, there is mounting competition from LNG projects ranging from Oregon and Alaska to the $200 billion being spent on eight LNG plants in Australia.

If it goes ahead, construction of the project is expected to run from 2013 to 2014, with the pipeline operational by early 2016.

 

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