A planned expansion of the Nova Gas Transmission System that was to fuel an expansion at the city's power plant has been cancelled, but city officials say an alternate plan will be less costly.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
TC Energy has cancelled a substantial pipeline that would have brought jobs to the region and more natural gas to Medicine Hat for a power plant expansion, but the city utility department says an alternative deal to supply gas for the new unit is in place.
The Nova Gas Medicine Hat Looping Project would have seen 65 kilometres of 24-inch pipe laid between the city’s north end and areas nearer to the TC Energy Mainline at Empress.
Scheduled to be built by 2023, it was to deliver additional gas on a 15-year contract with the city to fire a second turbine at the municipality’s expanding north-end power plant.
However, TC’s application for the project was withdrawn from National Energy board consideration last month.
Now city officials say they have negotiated a similar deal to deliver required supply through other TC Energy facilities around the city.
“It’s a business decision on their end,” said Brad Maynes, the city’s managing director of energy and utilities, on Thursday.
“Having it built out would have been great for our long-term gas supply needs … We would have preferred in general to have seen the economic activity,” he said, referring to line construction and larger capacity to the general industrial base. “But we’re comfortable with the supply and don’t think there will be a matter with capacity.”
The loss of a big-inch pipeline project in the region is a blow. TC officials told Cypress County officials in early 2020 that construction could last 18 months and employ 500 workers before it was online in 2023.
In late 2019 the city signed a deal to lock up supply from the new loop for 15 years – part of the contracting process that TC Energy needed to ensure sales and economic viability of building the second line.
That likely included deliveries with other large customers considering the size of the line.
Now the city and TC Energy have reworked the deal to meet demand by increasing deliveries at several other points in the city, said Maynes. Gas arriving at distribution stations in the south and west of the city would be directed through the city’s network to customers and the city’s Unit 17 power plant turbine near Box Springs Road.
That project, to twin the three-year-old Unit 16 plant, should be online early next year. At that point, TC will supply an additional 7,600 gigajoules of gas per day through alternate points, and the city utility department has booked an additional 9,300 gigajoules per day in 2023, enough gas to fully fuel the new turbine.
The existing Nova Gas System line already delivers gas to top up the city’s own production during high demand periods in winter, takes off production in the summer, as well as supplies high pressure gas directly to the city’s Unit 16 power plant near Box Springs Road.
In 2019, city administrators said the extra volume was required for internal use by the utility department, as well as meet general demand growth in the city.
After TC Energy completed its survey and routing work in the fall of 2020 the company informed the National Energy board it would seek to delay the in-service date.
In April it was allowed to withdraw the proposal stating that new gas demand forecast and supply outlook showed the line was not needed.
