Union Gas has announced approvals for two natural gas pipeline projects in rural southern Ontario and also revealed it has formally applied for funding under a new provincial program that will see hundreds of millions of dollars’ worth of other remote gas infrastructure projects undertaken by the firm and its competitors.
The two imminent projects, in Kettle and Stony Point First Nation and Lambton Shores, northeast of Sarnia, and Milverton, Rostock and Wartburg, west of Waterloo region, will get underway this month with completion expected in 2018. The Lambton Shores project involves laying 20 kilometres of pipeline while the Milverton area build will see 47 kilometres of new line laid.
Union Gas announced it obtained approvals for the two builds from the Ontario Energy Board (OEB) on Aug. 11, a day after the OEB issued its decisions.
A decision on a third project, for Prince Township, was put off when the local First Nation argued that Union Gas had not yet satisfied its duty to consult. A fourth, to serve the Delaware Nation of Moraviantown First Nation, awaits funding approval.
Union Gas communications manager Andrea Stass reported that contractors and consultants participating in the projects include Neegan Burnside, involved in preliminary environmental work including identifying preferred routes and preparing an Environmental Protection Plan; Aecon, serving as the contractor for the two jobs; Aecon subcontractor TW Johnson, installing the pipelines; and in-house engineers from Union Gas, working on pipeline and station engineering.
Stass acknowledged that at a time when larger petroleum pipelines are controversial, the extensive network of smaller natural gas pipelines it builds and operates goes pretty well unnoticed.
"I think it is out of sight, out of mind," she said. "We don’t get reminders that they are there because they do operate reliably. Most of the time, you are not even aware they are there. We have over 70,000 kilometres of pipeline in Ontario."
The Lambton Shores project has a capital cost of $1.78 million that includes construction of one remotely monitored distribution station while the Milverton job is valued at $5 million with distribution stations at Milverton, Rostock and Wartburg.
The Union Gas infrastructure division could get a whole lot busier if the firm is successful with recent applications submitted under the province’s new $100-million Natural Gas Grant Program, announced in January. The program is designed to expand access to natural gas for currently unserviced regions, including those in rural and northern Ontario and First Nations communities.
The program has two streams, with $70 million allocated to community expansion and $30 million for economic development. The first deadline for applications was July 31. Stass said Union Gas submitted 45 proposals for communities and five for economic development.
An Infrastructure Ontario spokesperson told the Daily Commercial News there had been good uptake on the program across the sector with requests exceeding the province’s available funding.
In unveiling the program, the province noted natural gas is less expensive than electricity, heating oil and propane and switching from oil to natural gas could save an average consumer an estimated $1,100 annually.
Regulatory changes introduced in 2016 had already helped make expansion into remote areas more viable for infrastructure builders, Stass explained. Firms are now able to charge new customers coming onto the system an annual levy that equates to $500 a year for a period of four years or longer, and municipalities and First Nations can now be asked for voluntary contributions, which many agree to, said Stass.
"Bringing natural gas into a community does spur economic development and you can attract businesses and homeowners to the community because of the lower cost of living and business operation," said Stass.
"And there’s the financial aspect as well, for the municipalities themselves, their own buildings, social housing, their own infrastructure, and they pay energy bills as well."
Stass said environmental regulations are stringent and the permitting process lengthy. The obligations for constructors do not end with approvals granted by the OEB, as Union Gas and its contractor must adhere to its environmental protection plan, she said.
"There are a lot of steps to take to make sure requirements contained in the environmental assessments are followed," said Stass. "We have construction monitors that are doing those things and making sure we do the top soil management, drainage, repair, tile repair, all of that."