Newspaper article The Canadian Press

Gaz Metro CEO Says TransCanada Project Will Hurt Natural Gas Consumers

Newspaper article The Canadian Press

Gaz Metro CEO Says TransCanada Project Will Hurt Natural Gas Consumers

Article excerpt

Gaz Metro CEO criticizes TransCanada project

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MONTREAL - The head of Quebec's largest natural gas distributor says TransCanada Corp.'s $12-billion, cross-country project to convert a natural gas pipeline to oil will hurt consumers, raise prices and reduce employment if implemented as proposed.

Gaz Metro (TSX:VNR) CEO Sophie Brochu said Tuesday that she is not mounting a political campaign against the project but demanded changes before an application is submitted in the coming days to the National Energy Board.

Brochu said 3.6 million natural gas customers in Quebec and Ontario will be affected, including large industrial customers who will be forced to pay higher energy costs in winter, unless the project ensures an adequate supply of natural gas at no higher cost.

She told the Montreal Board of Trade that TransCanada (TSX:TRP) should build a new oil pipeline section between North Bay, in northeastern Ontario, and Ottawa instead of converting the existing line and building a smaller capacity line for natural gas at an estimated cost of more than $1.5 billion.

Calling her solution "logical," she said oil producers and not natural gas customers should pay for the changes that will carry western oil to markets in the east.

"I don't accept that we ask domestic consumers of natural gas to interfinance the exportations of petroleum," she later told reporters.

Brochu estimated that the new oil pipeline section would cost producers just 50 cents a barrel, a fraction of the price of crude that is currently hovering around US$83.

TransCanada said the company and its Energy East oil shippers will contribute $500 million to the cost of building this new natural gas pipeline.

"We estimate this contribution, combined with reduced operating and maintenance costs, will save our customers $900 million over the next 15 years. These are important savings for companies like Enbridge, Union Gas and GazMetro -- and it is reasonable to expect that these savings will be passed on to consumers," said spokesman Shawn Howard.

Gaz Metro said the conversion of the 3,300-kilometre Energy East pipeline between Alberta and Quebec would reduce the supply of natural gas for customers during peak winter months and for economic development. …

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