September 10, 2012 / 9:22 PM / 7 years ago

UPDATE 1-BG, Spectra planning B.C. pipeline to serve LNG plant

* Planning joint-venture gas-pipeline project in B.C.

* 850-kilometer line could carry 4.2 bcf per day

* Might cost between C$6 billion and C$8 billion

CALGARY, Alberta, Sept 10 (Reuters) - Spectra Energy Corp said on Monday it and BG Group Plc are planning a new natural-gas pipeline system in northern British Columbia worth as much as C$8 billion ($8.2 billion), to take the fuel from the province’s shale-gas fields to a proposed LNG-export facility.

Spectra, which operates pipelines in Canada and the United States, said it hopes to build a 850-kilometer (525-mile) line with the capacity to carry as much as 4.2 billion cubic feet of gas per day from the province’s northeast corner to the liquefied natural gas plant planned by BG at the port of Prince Rupert.

The planned line is the latest in a round of LNG-infrastructure announcements for northern British Columbia. The province’s shale-gas deposits contain trillions of cubic feet of natural gas far from North America’s natural-gas markets, but close enough to the Pacific coast to make LNG development viable.

Five gas-liquefaction project have so far been proposed for the province’s northern Pacific coast to tap Asian demand for the fuel. Kitimat LNG’s facility, owned by Apache Corp, Encana Corp and EOG Resources Inc, is seen as the most advanced, while projects planned by Royal Dutch Shell Plc and others are still in their early stages.

Gary Weilinger, a vice-president at Spectra’s Western Canadian operations said the company in still in the planning stages of the line, which would be unlikely to be completed until at least 2015.

“We’ve got just very high-level, preliminary work,” he said. “There are going to be a number of different alternatives that we’re still exploring in terms of routing, depending on some of the sensitive areas that we may or may not need to go through. It’s still very early days.”

While Spectra does not have a firm capital budget for the project, Weilinger said the project would likely cost between C$6 billion and C$8 billion.

The pipeline would be built by Spectra, while its joint-venture partner will contract for all the line’s capacity as BG looks for supplies to fill its LNG plant.

In May, Spectra said it would spend $4 billion to $6 billion in British Columbia after 2015 to build projects that could include large pipelines connecting the Canadian province with energy-hungry Asian markets.

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