Spectra eyes supporting LNG exports from Prince Rupert, British Columbia: CEO
Houston (Platts)--2Aug2012/101 pm EDT/1701 GMT
Spectra Energy is considering enhancing its pipeline grid in British
Columbia to support liquefied natural exports out of Prince Rupert and is
already in "advanced negotiations," CEO Greg Ebel said Thursday.
Two of the five LNG export proposals out of British Columbia, from the
UK's BG Group and Malaysian state-owned Petronas, are for sites in Prince
Rupert. The other three are in Kitimat, south of Prince Rupert.
"Our view is that Kitimat is a great location, but it's not the only
location," Ebel said during the company's second-quarter earnings call. "We
think Prince Rupert is a great location. In my view, we don't see four or
five of those projects getting built, we see between one to three."
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Spectra's 3,540-mile gas pipeline system in British Columbia is
connected to both Kitimat and Prince Rupert by existing laterals, although
these are smaller-diameter lines, with a maximum capacity of some 150,000
Mcf/d, far less than the capacities announced by all of the Western Canadian
Spectra would commit $4 billion-$6 billion to Western Canadian
infrastructure projects to support LNG exports, enhanced gathering from the
Horn River and Montney shales and processing facilities, Ebel said. The last
of these projects will go into service next year, he added.
BG Group in February signed a deal with the Prince Rupert Port Authority
to conduct a feasibility study for its LNG export terminal. A spokesman with
the Prince Rupert agency said at the time that BG was looking at the Ridley
Island industrial site, adjacent to the city of Prince Rupert.
BG Group has yet to announce a proposed in-service date or capacity for
Petronas in June, meanwhile, agreed to conduct a feasibility study with
the port authority, for a site on Lelu Island. Its project is slated to come
online by late 2017 or early 2018 with a capacity of 940,000 Mcf/d.
Rival Canadian pipeline company TransCanada appeared to have the edge in
the infrastructural race when in June it was selected to build, own and
operate the 420-mile Coastal GasLink pipeline from Dawson Creek to Shell
Canada's planned LNG export terminal in Kitimat.
Backers of the Kitimat LNG terminal -- Apache, Encana and EOG -- got the
provincial green light in April to expand their proposed Pacific Trails
Pipeline, which would run from Spectra's gas processing complex in Summit
Lake to Kitimat.
Houston-based Spectra saw its second-quarter earnings fall some 24%
to $215 million from $284 million during the same time a year ago.
The biggest drag on earnings proved to be its field services unit, which
includes its stake in DCP Midstream. The unit saw earnings fall to $104
million for the second quarter, compared to its year-ago level of $217
million. Spectra executives on Thursday attributed the drop-off to lower
natural gas liquids and gas prices.
Spectra's stock price was down $1.10, of 3.6%, to $29.45/share as of
11:45 a.m. CDT (1645 GMT) amid light trading.
--Samantha Santa Maria, email@example.com
--Edited by Richard Rubin, firstname.lastname@example.org