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Enbridge still sees New England potential in US natural gas expansion plans

Highlights

Access Northeast stalled; other projects scuttled

Region a big importer despite proximity to abundant production

Houston — Canada's Enbridge will continue to push regulators in the US at the local, state and federal level to allow it to build new natural gas transmission infrastructure that can serve New England consumers with production from the nearby Appalachian Basin, CEO Al Monaco said Friday.

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The pipeline operator is seeing strong utilization on its Texas Eastern Transmission and Algonquin Gas Transmission systems and it believes that being able to move more supply from closer basins in the US Northeast would be a significant growth opportunity.

Environmental opposition in the region to fossil-fuel development has helped scuttle or delay some major gas projects in New England. Among them, the Access Northeast project that Enbridge is involved in is currently stalled. Officially, the company hasn't given up on that project or other opportunities. Monaco said the demand is there, largely because the pipeline-constrained region experiences high energy prices during peak periods such as the winter.

"It's never been more clear that we need additional natural gas infrastructure and nowhere is that more evident than in the US Northeast," Monaco said during a conference call with analysts to discuss fourth-quarter financial results.

He said New England consumers are saddled with "higher priced, lower reliability peaking supply from oil generation and foreign LNG imports, and this is actually an unbelievable irony when the Marcellus is sitting right next door to this market."

"We'll continue to work with regulators and local politicians to bring forward solutions to this problem," Monaco said.

Despite the proximity of the Marcellus and Utica shale plays, New England imports significant volumes of gas from Canada via pipeline and other countries via LNG tanker to meet peak demand. Market experts blame insufficient west-to-east and south-to-north pipeline capacity to transport gas there from producers in Pennsylvania and West Virginia.

At a conference in Boston last June, an Enbridge development official said that the company's Access Northeast partners, utilities Eversource and National Grid, were also committed to a New England solution.

Meanwhile, Enbridge is expanding its US gas transmission operations in other markets. It said in December that it will invest in new gas transmission expansion projects coming into service in the 2020-23 time frame, largely to serve offshore, Gulf Coast and Southeast markets.

During Friday's earnings call, Enbridge executives said the company's goal is to run a pure play utility pipeline business that focuses on generating predictable long-term fixed fees. The company has sold billions of dollars in non-core assets to overhaul its portfolio around that mission, and it has retooled its corporate structure following the 2017 acquisition of US midstream operator Spectra Energy.

"Bottom line, this simpler structure is a big plus and allows us to focus energy on the core businesses as we should," Monaco said on the conference call.

-- Harry Weber, Harry.Weber@spglobal.com

-- Edited by Annie Siebert, newsdesk@spglobal.com