TAYLOR: No link yet between Emera, proposed new gas lines in New England | The Chronicle Herald

Halifax energy conglomerate Emera Inc. isn’t hiding its ambition to become a major supplier of natural gas to Atlantic Canada.

But an Emera spokeswoman told me Thursday the company has not signed on as a customer of new gas pipelines proposed to increase the supply of natural gas to the northeastern United States.

Earlier this week, Spectra Energy Corp., the largest partner in the Maritimes & Northeast pipeline, which brings natural gas produced off Nova Scotia’s shore to New England, announced it is partnering with Northeast Utilities to expand the capacity of two pipelines now supplying the region.

The plan is to expand the Algonquin pipeline, which runs from New Jersey to Everett, Mass., and the Maritimes & Northeast pipeline from the Canadian border to Dracut, Mass.

The expansion project, called Access Northeast, would be completed by 2018 but first must be approved by the U.S. Federal Energy Regulatory Commission.

Expansion of the Maritimes portion of the Maritimes & Northeast line is not in the plans, according to the pipeline company — not yet anyway.

The new partners in the U.S. say they will invest US$3 billion in Access Northeast, which will bring an additional one billion cubic feet of shale gas per day to the New England market.

Earlier this year, Spectra announced a similar but different plan to expand the Algonquin pipeline, which could be in operation by 2017 if approval is granted by the commission.

In an unrelated proposal, pipeline company Kinder Morgan Energy Partners LP announced earlier that it intends to build a pipeline from Pennsylvania across New York state to western Massachusetts, but that plan has not been filed yet with the commission.

The demand for natural gas has increased due to new environmental rules being implemented in New England, which creates greater demand for natural gas to generate electricity and for heating purposes because it is considered cleaner than oil and coal.

Last winter, New England natural gas users suffered high gas prices at times due to a tight supply and a lack of pipeline capacity to bring more of the fuel to the marketplace.

That was good news for companies such as Encana Corp., which started production from its Deep Panuke project off Nova Scotia just in time to take advantage of higher prices in the New England spot market.

It created a sizable windfall for the Calgary energy company, which made holding onto Deep Panuke, even though it is considered a non-core asset, more attractive for the company, which now gets most of its gas from unconventional sources that require the use of hydraulic fracturing of shale formations.

According to the Boston Globe, during one period of particularly low temperatures last winter, wholesale electricity prices shot up to US$1,290 per megawatt-hour for a brief period, compared with a yearly average of US$36 per megawatt-hour.

Fracking has made tapping shale gas reserves a viable option for states such as Pennsylvania, Tennessee, Louisiana and Texas, which has resulted in lower natural gas prices in large portions of the U.S. but not yet in New England.

Emera is not fracking formations to discover natural gas itself, but it plans to use its connections with producers working the Marcellus field in Pennsylvania.

Using those contacts, the company has told industry analysts that it plans to cautiously build its shale gas transmission business one pipeline leg at a time.

Emera owns a 12.9 per cent stake in the Canadian portion of the Maritimes & Northeast pipeline.

If the pipeline is not expanded on the Canadian side to allow gas to flow in both directions, there is potential that Emera could someday reverse the current flow of gas to bring shale gas from the U.S. to the Maritimes.

via TAYLOR: No link yet between Emera, proposed new gas lines in New England | The Chronicle Herald.