Canadians Store Natural Gas for Others

Gas storage customer lined up
New Brunswick natural gas firm interested
By JUDY MYRDEN Business Reporter
Sat. Jun 21 - 6:09 AM

A Calgary energy company and its partners are poised to sign a deal with their first customer to store natural gas at their proposed $60-million underground facility near Truro.

Alton Natural Gas Storage L.P., owned by Landis Energy Corp. and Fort Chicago Energy Partners, both of Calgary, said Friday they are "pursuing an agreement" to lease storage space to Enbridge Gas New Brunswick.

"It gives you more flexibility around your supply portfolio," Dave Charleson, Enbridge Gas manager, said Friday.

Mr. Charleson said storing natural gas would allow the company more price stability. The distributor could store gas in the off-season and then sell it to consumers at lower prices.

"It gives us a little more flexibility around the season," said Mr. Charleson, adding that in mature gas markets, such as Ontario, natural gas storage is used extensively. .

The practice would also give Enbridge the option to purchase gas from other suppliers and store it in the caverns if the main supplier, the Sable natural gas project, is experiencing a decline in volumes.

Enbridge now uses the Maritimes and Northeast Pipeline, which travels through Nova Scotia to New Brunswick, to provide natural gas to 8,600 homes and businesses. In 1999, the company signed a deal with the New Brunswick government for the exclusive rights to distribute natural until 2020.

The proposal has already received the necessary environmental permits.

"This shows there is demand for gas storage," David Birkett, president of Alton Natural Gas Storage, said Friday. "We are negotiating with others but this is the first one that has indicated clearly they are willing to move forward, and it won’t be the last one."

Landis would use piped-in river water to hollow out salt caverns for gas storage in Colchester County, treat the water to reduce salinity and then discharge it into the river.

The storage facility is expected to include a series of engineered salt caverns more than 700 metres deep. The caverns will be developed using water from the Shubenacadie estuary, transported through about 12 kilometres of buried pipelines. Four initial caverns will be formed and others may be created later. Alton recently finished clearing the cavern site, and engineering and pre-construction surveying is complete. The company is obtaining the water pipeline right-of-way and has started acquiring the necessary easement for that right-of-way.

A few months ago Alton announced a pipeline proposal that would originate southeast of Truro and ship gas to Quebec and into the northeast U.S.

The Atlantic Connector Gas Pipeline would have an initial capacity of about 1.2 billion cubic feet per day. It would originate near Alton and stretch through New Brunswick and into Quebec to hook into the national gas transmission grid.