Enbridge Readies for Pipeline Expansion to Support Canadian West Coast LNG Project

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land Texas)

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Summary

The Canada Energy Regulator is recommending the government's approval of a significant expansion on Enbridge's Westcoast natural gas pipeline system in Canada.

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Canada's Energy Projects Geared Toward Asian Shores

It's no secret that Canada is looking for export markets other than the U.S. for its oil and natural gas. With that in mind, a British Columbia liquefied natural gas (LNG) project is coming together and is expected to begin exports in 2027--the Woodfibre project near Squamish.

To help meet the plant's natural gas demand, Canada's Enbridge Incorporated is gearing up for the Sunrise expansion project on its Westcoast natural gas pipeline system in Canada, which entails work on multiple compressor stations and several miles of additional pipeline loops. Enbridge has its own end-stake in the project, as it is 30% owner of the Woodfibre LNG project.

Major Hurdle Cleared

The Sunrise expansion project, on the cusp of beginning, has been some years in the making. After early planning, Enbridge gauged customer demand for the expansion, resulting in an initial successful open season in 2022, furthering the project's chances of development. In May 2024, Enbridge, via its Westcoast Energy Limited Partnership subsidiary, submitted its plans to the Canada Energy Regulator (CER) for a decision on whether the agency would recommend that the federal government approve the project, the final major approval needed to start the work.

At the end of January, the CER gave a positive decision on the project, recommending that it be approved to go ahead. Following a CER recommendation, major projects such as the Sunrise expansion are then passed on for approval by the Governor in Council (GIC), which includes the governor general acting on advice cabinet ministers. Time is now ticking away on the 90 days the GIC has to approve or deny the project, but the Woodfibre LNG plant is years into construction and will present a 220 million-cubic-foot drain on area gas supplies when completed, making a firm case for approving the Sunrise project that will bring more natural gas to the area. Enbridge's start on the project could happen anytime between now and late April following GIC approved.

What Is the Sunrise Project?

The Sunrise project entails a significant addition of pipeline loops, construction of grassroot compressor stations and unit additions at existing stations. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can access reports on four grassroot compressor stations along the route, in addition to seven modification projects and four unit additions at existing stations.

All of this comes in addition to around 85 miles of new 42-inch pipeline loop that is part of the project. With the GIC's final say on the project imminent, Enbridge could begin work on various components of the Sunrise project as soon as this spring.

The ultimate aim of this significant spending is to grow the T-South portion of Enbridge's Westcoast system in southern British Columbia by 300 million cubic feet per day. The existing average transmission capacity on the T-South system is 1.6 billion cubic feet per day (Bcf/d), meaning Sunrise would push the transmission capacity on T-South to close to 2 Bcf/d. The Woodfibre LNG plant is expected to consume most of the new capacity.

In addition, IIR is tracking other compressor station projects associated with Woodfibre that are outside of Enbridge's scope.

The Woodfibre LNG Project

Initial plans for the Woodfibre project were drawn up more than a decade ago. The intended site of the plant, on the north the Howe Sound, leading into the Strait of Georgia and on to the greater Pacific, was previously the site of a pulp mill that operated for nearly a century. In addition to Enbridge's 30% ownership in the Woodfibre project, the remaining 70% belongs to Pacific Energy Corporation, part of Singapore-based RGE Group.

The site potentially provides a novel element in that it is near significant hydropower sources that will be used by Woodfibre, allowing developers to tout that the LNG produced will be the world's first net-zero LNG.

Following a 2015 environmental assessment on the site's suitability, the LNG project was approved in 2016. But the plant received its export license just as the COVID-19 pandemic drastically reduced the demand for gas across the world. In March 2020, construction was delayed until 2021. Little movement was seen until 2022, when site clearance and other preparation work began, and Industrial Info pegs the start of significant construction in late 2024. Subscribers to Industrial Info's GMI Project Database can learn more by viewing the related project reports.

A 2027 startup date, slightly before the expected completion of Enbridge's Sunrise expansion, is in the cards for the LNG plant, when it will ramp up to turning 220 million cubic feet per day of natural gas into 2.1 million tons per year of LNG for export via two Linde production trains. The site will include 250,000 cubic meters of storage capacity in the form of a floating storage and offloading (FSO) tanker moored to the shore.

With the U.S. having no LNG plants on the Pacific, the Woodfibre plant's West Coast location puts it in a strong position to export product to Asia, significantly reducing travel time in comparison with the Atlantic and Gulf of America LNG plants in the U.S. Regardless, Enbridge and Pacific Energy needn't worry about finding a market for their LNG--that issue already has been resolved through a contract with BP Gas Marketing to purchase the plant's entire output.

With the Woodfibre plant very much on its path to completion next year and promising to be a significant outlet for the area's available natural gas resources, Enbridge's Sunrise pipeline expansion project seems to present few questions regarding its need or relevance in southern British Columbia. With the federal government poised to give its final say on the project, Enbridge could take Sunrise out of the planning and engineering stages and be turning dirt on the project very soon.

Key Takeaways

• Enbridge's Sunrise expansion project, planned for the southern portion of its Westcoast natural gas pipeline system, has been approved by the CER, prompting a decision on the project from Canada's federal government by the end of April.
• The project includes construction of multiple grassroot compressor stations as well as modifications and unit additions at existing facilities.
• The Sunrise projects adds 85 miles of additional pipeline loops and will support the Woodfibre LNG project being developed in British Columbia.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).