Clients, Visitors and Energy Knowledge Seekers,

We are foraying into the world of blogging. We hope to provide updates, for your reading, as often as possible, pertaining to all sectors and corresponding sub-sectors of the natural gas market. Our intent is to provide a one stop shop for all pertinent information regarding your natural gas service and the state of natural gas in Canada in general. We hope to deliver some new insights into how the market is rapidly changing, not only in Canada but in North America and the world. The new shale plays in the US combined with new projects and programs in the liquefied natural gas (LNG) markets provide for a very exciting time. As we see political pressure build toward reducing greenhouse gasses and eliminating coal fired power plants, we’re sure to have almost constant updates on the new natural gas landscape. In general, we take no ownership for the information we link to or include in our posts. The viewpoints expressed in all articles are those of the authors and we only include their work as a reference to the topic at hand or for added information regarding a particular topic.

As always we, at CESi, strive to provide value added services required in today’s complex energy market. Our team offers timely solutions to manage every natural gas portfolio, so that our clients always receive leading edge ideas and a proactive, rather than reactive, analysis of their energy requirements. We hope that our clients and future clients will find this information useful and demonstrate our personal guarantee to be on top of all developments in the natural gas market and, as always, to transfer our knowledge and experience to help increase our clients bottom line.

This weeks’ blog is focused on the recent BIG developments in the Transportation Sector of the Natural Gas Market. Last week 3 major energy companies announced the joint venture for the Nexus Gas Transmission Line. Spectra Energy Corp (based out of Houston), Enbridge Inc (Canada) and DTE (Detroit) have agreed to the roughly $1.5 Billion dollar pipeline venture to link eastern Ohio’s shale gas fields to customers in Ohio, Michigan and Ontario. Although the pipeline is still pending FERC’s (Federal Energy Regulatory Commision) approval, the 36 inch diameter pipeline would run through existing power line corridors which would yield a minimal impact on the environment and neighboring communities. The Total capacity of the pipeline is expected to be able to transport 1 Billion Cubic Feet (Bcf) of Gas daily with an expected target date of completion of November 2015.

In the West, Spectra Energy Corp and BG Group PLC have proposed a MEGA-pipeline through British Columbia to export Liquified Natural gas to Asia/Pacific Markets. The 850 Kilometer Pipeline would yield a capacity of 4.2 Bcf/day which is more than what Ontario and Quebec use on a daily basis. This announcement comes after TransCanda Pipeline announced earlier this year its plans for their “Coastal Gaslink” Pipeline which would transport gas from Alberta to Kitimat, BC. TCPL’s pipeline is expected to have a capacity of 1.7 Bcf/day to be turned into LNG for export to countries such as Japan, China and South Korea with added potential for India and Thailand. As these pipelines are in early stages the expected operational start date would not be till 2019.

Implications:

Over the recent years the U.S has found an abundance of Natural Gas through the, sometimes controversial, method of Fracking. Their reliance on imported Natural gas from Canada has declined significantly and is expected to drop another 2 Bcf/day over the next 5 years from the current level of 6.9 Bcf/day. This means as the TransCanada Pipeline (TCPL) Main line, which flows gas to the east, has been gaining a significant amount of excess capacity. Currently producers feel the toll charges are too expensive, recently transportation cost were more than the actual physical gas, TCPL is feeling pressure to reduce its toll charges in order to stay competitive in the North American Market. For Canada as a country, with declining exports to our main trading partner the U.S, we must seek other viable countries to export our oil and Natural Gas too!

Sources:

1. New $1.5 billion natural gas pipeline proposed for northern Ohio

Published: Tuesday, September 04, 2012, 7:08 PM Updated: Tuesday, September 04, 2012, 11:27 PM

By John Funk, The Plain DealerThe Plain Dealer

2.Conceptual Route of Proposed Spectra Energy and BG Group new natural gas transportation system from Northeast British Columbia to Prince Rupert, on British Columbia's northwest coast.

Spectra, BG make big pipeline bet in the race to B.C.’s coast

BRENT JANG AND NATHAN VANDERKLIPPE

VANCOUVER AND CALGARY — The Globe and Mail

Published Monday, Sep. 10 2012, 10:40 AM EDT