Pipeline Basics Prince Rupert Gas Transmission Project
What is natural gas? Natural gas is the cleanest burning of the fossil fuels, often found in underground rock formations deep below the earth s surface. It is a naturally occurring gas mixture consisting primarily of methane, but may also contain other products such as propane and butane. While natural gas can be used to fuel vehicles, it should not be mistaken for gasoline, which is made from refining crude oil and also used to fuel vehicles. TransCanada has been contracted to design, build, own and operate a major natural gas pipeline through central B.C. to Lelu Island, in the District of Port Edward where the gas will be converted into liquefied natural gas, or LNG. LNG is natural gas that has been converted to a liquid form for storage or transportation. LNG takes up approximately 1/600th of the volume of natural gas in its gaseous state. It is condensed to a liquid by cooling it to approximately -162 degrees Celsius. It is transported on specially designed LNG carrier ships, and then regasified following transportation. page 1
About TransCanada Alaska Pipeline Project Across North America, our natural gas pipelines move 14 billion cubic feet of gas per day. That s 20 per cent of the natural gas consumed each day. (see map) Prince Rupert Gas Transmission NGTL System TransCanada has operated natural gas pipelines in B.C. for more than 50 years. Across North America, we operate one of the largest natural gas pipeline networks 68,500 kilometres tapping into virtually every major gas supply basin. Coastal GasLink GTN Foothills Bison Canadian Mainline Great Lakes TQM The Prince Rupert Gas Transmission project will supply natural gas to a proposed Pacific NorthWest LNG conversion facility near Prince Rupert. The gas will travel some 900 kilometres from the North Montney gas fields near Hudson s Hope. Another TransCanada project, Coastal GasLink, will supply natural gas from a point near Dawson Creek to a proposed LNG facility near Kitimat. TransCanada s facilities and operations employ more than 5,000 people in 50 professions. Tuscarora North Baja Topolobampo Guadalajara Mazatlan Tamazunchale Extension Tamazunchale ANR Portland Iroquois Natural Gas Pipeline Natural Gas Pipeline (Under Construction) Natural Gas Pipeline (In Development) Natural Gas Pipeline (Proposed) Gas Storage page 2
Why do we Build Pipelines? Pipelines are the safest way to transport large volumes of natural gas across Canada and the United States to meet North America s energy demands. Communities depend on the natural gas that we ship to heat homes, schools, hospitals, businesses, and to generate electricity. Natural gas used by a typical Canadian home in one year: Approx. 100 gigajoules of energy, or 94,800 cubic feet of natural gas. Natural gas used to heat all Canadian homes for two years: 1 trillion cubic feet page 3
Pipeline Project Planning Hundreds of employees and contractors are involved in planning a typical pipeline project. We ensure there is a comprehensive plan that considers pipeline quality and safety, and the well-being of the people and environment potentially affected by the project. Other groups involved in pipeline project planning include: Project Management Regulatory Safety Engineering Pipeline Construction Planning Pipeline Integrity Emergency Response page 4
Route Selection We began studying a proposed route more than a year ago, and have since refined the route through discussions and feedback with Aboriginal groups, communities, landowners and stakeholders. We have also conducted numerous environmental studies to ensure we are minimizing any impact on wildlife, soil, water and vegetation. We strictly follow regulatory guidelines, and are in the process of completing our applications to the B.C. Environmental Assessment Office and the B.C. Oil and Gas Commission for an environmental certificate. We choose the best route possible based on: Constructability Public Safety Land Use Compatibility Economics Archaeological and Cultural Resources Aboriginal, landowner and local government engagement Stakeholder Input Environmental Studies page 5
ALBERTA 37 Pink Mountain Wonowon Fort St. John ALASKA Stewart 37 Prince Rupert Gas Transmission Hazelton New Hazelton Taylor Hudson s Hope Chetwynd 97 Mackenzie Dawson Creek BRITISH COLUMBIA Terrace Prince Rupert Port Edward Kitimat 37 16 Smithers Telkwa Granisle 16 Houston Burns Lake Fort St. James Tumbler Ridge Fraser Lake Vanderhoof Prince George 16 PRGT ONLY Prince Rupert Gas Transmisson Prince Rupert Gas Transmission (PRGT) Study Corridor Conceptual Corridors Initial Build Compressor Station Potential Future Compressor Station Other Proposed Pacific NorthWest LNG Export Facility (3rd party) 97 TransCanada s NOVA Gas Transmission Ltd. (NGTL) Existing System Proposed North Montney Mainline Project Highways Cities and Towns Offshore Pipelines The map above shows the current Prince Rupert Gas Transmission study and conceptual corridors. Along the west side, we studied several marine alternatives for routing the pipeline offshore, and have eliminated several of them. Two alternative routes Nass Bay and Nasoga Gulf will continue to be studied. A favourable marine alternative would have the least environmental impact and is operationally safe and cost effective to build. Laying a pipeline in water is not a new endeavour. The practice has been used for many years to cross rivers and streams, and to lay pipe along the ocean floor. page 6
Pipeline Construction Pipelines are built using the safest, least disruptive methods that have continually developed over the past three-quarters of a century. They are usually built in sections or spreads. Each section can take several weeks, depending on terrain, before crews move on to construct the next spread. Clearing/Grading Trenching Stringing/Bending Lowering in and tie-ins Welding/Coating Pressure testing Cleanup/Reclamation page 7
Horizontal Drilling Rig Drilling Fluid Returns Prefabricated Pull Section General Direction of Pulling Back Swivel Watercourse crossings Crossing rivers and streams requires a special procedure to ensure that impact on watercourses is managed and kept to a minimum. The pipeline industry has many years of experience in crossing streams and rivers. There are several ways to achieve this. Watercourse methods are typically grouped as follows: Trenchless: This method does not involve in-stream work. Horizontal directional drilling is a common trenchless method, as noted in the diagram. Isolated crossing: This method uses either a flume or dam and pump system to temporarily redirect the stream while the pipeline is laid into place. The dam is removed and the stream returns to its normal course. Open cut: This method is generally used when the watercourse is dry, frozen or has limited fisheries value, or as a contingency crossing method for large river crossings. page 8
Even though the pipeline is underground, the project will include above-ground facilities such as compressor stations and meter stations. We will use state-of-the-art noise reduction technology to ensure the stations are quiet. For example, at compressor stations, noise levels will be limited to 40 decibels when measured 1.5 km from the fence line. For comparison, normal conversation between two people standing one metre apart is 60 decibels. Compressor Stations As natural gas flows along a pipeline, it loses energy due to the interaction of the moving gas particles with the pipeline surface. This results in a loss of pressure along the pipeline. In order to make the gas flow continuously at a desired rate, it is re-pressurized at suitable locations along the pipeline. This is done by mechanically compressing the gas at compressor stations connected to the pipeline. The location and quantity of compressor stations required in a pipeline system is dependent on a number of factors including the operating pressure of the pipeline, the diameter of the pipe used, elevation changes along the pipeline route and the desired volume of gas to be transported. Meter Stations As a pipeline company, we need to manage the movement of gas through the system efficiently. Meter stations perform several important functions, one of which is determining how much gas is in the system at all times. To accomplish this, meter stations measure the amount of natural gas entering or leaving the pipeline system. Typically there are two stations one at the beginning, or at the receipt point where natural gas first enters the pipeline, and one at the end, or at the delivery point where our customer takes possession of the gas. page 9
Contracting and Employment Opportunities We require qualified companies and individuals to plan, build and operate our pipelines. We believe in supporting local communities near our pipeline projects and provide opportunities through employment and contracts to local residents and businesses. As such, we require our prime contractors to hire qualified subcontractors. These relationships are critical to the success of our pipeline projects and operations while benefiting local communities throughout North America. We work with Aboriginal groups and communities to identify businesses and individuals who have an interest in project-related contracting and employment opportunities. Subcontractors are selected based on their qualifications, capacity, safety performance, availability and cost. Companies interested in contract work are encouraged to register with us through the vendor registration process. Visit our project website at www.princerupertgas.com for more information. If you are an individual looking for employment on our pipeline projects, you can find general information about jobs and their requirements listed on our website at www.princerupertgas.com. page 10
Reclamation Returning the land to its previous state is a goal TransCanada takes to heart. We are committed to minimizing the pipeline s environmental impact both during construction and after the pipe is in the ground. Recognizing the importance of forested terrain as well as soil and topsoil conservation, the project team will execute established techniques designed for the highest quality reclamation process. With more than 60 years of experience building and operating pipelines, TransCanada has reclaimed thousands of acres on pipeline rights-of-way throughout North America. As with all of our pipeline projects, great care and planning is taken to minimize and avoid impacts to the environment, including rare or endangered species, habitat, significant water crossings, and historical and paleontological resources. We take great care during all stages of our work, from surveying and clearing, to backfilling and site cleanup and reclamation. As well, we continue to monitor the right-of-way during the life of the project to ensure our ongoing impacts are managed appropriately. page 11
Protecting the Environment At TransCanada, we recognize the importance of stewardship of the environment. This attitude and commitment is part of everything we do. It s the right thing to do. By working closely with Aboriginal groups and local communities, we ensure that the impact on the environment is kept to a minimum and mitigative measures are adopted. We recognize that the environment plays a critical role in society and the economy. When we know our project will impact the environment we work hard to mitigate the effects, and return the land and its environment to as close to its original condition as possible. During the life of the project, we monitor our activities to avoid impact on watercourses and wetlands, vegetation and soils, wildlife and their habitat, air quality and noise, traditional land use and heritage resources. For the 12 th year in a row TransCanada was named to the World Dow Jones Sustainability Index, a global ranking system that tracks the performance of the leading sustainability-driven companies. page 12
Safety of our Pipelines TransCanada s pipelines are designed, built, and operated to ensure the safety of our natural gas transportation system. We work to meet or exceed industry and government standards to ensure public safety. Design Industry leading steel and welding techniques used; Higher design safety factor when crossing roads, railway tracks, waterways or near communities; Precautions include using thicker-walled pipe and burying the pipeline deeper in areas of higher population. Construction Welds checked by ultrasonic inspection and/or x-ray; Pipelines coated to protect against corrosion; Pressure-testing pipe by filling with water and pressurizing higher than maximum operating pressure to ensure pipe is ready for operation. page 13
Safety of our Pipelines continued Operations All of our pipelines are monitored 24 hours a day by trained operators who respond immediately to any indication of abnormal operation Aerial surveillance of pipeline routes is flown regularly to look for encroachment and unauthorized activity on the pipeline corridor; Cathodic protection through a low-voltage electrical current is applied to the pipe to protect against corrosion; Electronic in-line inspection devices known as smart pigs are periodically used on sections of the system to detect corrosion and potential defects; Sections of pipe are routinely excavated and visually examined to assess their integrity; Each region is fully staffed with qualified technicians who ensure the safe and efficient operation of our facilities in the area; Public awareness program, which explains how to operate equipment and use rights-of-way where pipelines are located. page 14
Emergency Response Our control centres can remotely control facilities and gather real-time data such as system pressures, flows, alarms and temperatures. In the unlikely event of a leak, TransCanada would act quickly to isolate and temporarily shut down the affected section of pipeline. It should be noted that a leak is different than a spill. Natural gas disperses in the air and doesn t collect on the ground. Once a leak is detected, the affected pipe is isolated from the rest of the pipeline system, allowing the leaked gas to disperse in the air. TransCanada is also committed to partnering with local emergency services to ensure the safety of the public, the environment, and the pipeline facilities. Our Emergency Response Plan is designed to protect the public and minimize any affects on the environment. Our Emergency Management System is documented and tested regularly through annual exercises (tabletop and field). TransCanada invites and encourages community involvement from local emergency responders during field exercises. In the event of an emergency, we will: Communicate early, often and with all of our stakeholders and Aboriginal groups; Work with local officials and emergency response agencies in a unified command approach to ensure all parties are involved, informed and working effectively together. page 15
Aboriginal Engagement TransCanada is a company that respects and values the interests and perspectives of Aboriginal groups, as well as stakeholders and landowners. We have a dedicated Aboriginal Relations team that has engaged with Aboriginal groups since the project was announced. These discussions include capacity development - funding to help facilitate participation in government regulatory processes and project field programs (including leading or participating in traditional use and traditional ecological knowledge studies), training and employment opportunities, business opportunities and long-term community benefits. We have actively engaged with approx. 25 Aboriginal groups who have an interest in the proposed pipeline routes. To date, discussions with Aboriginal groups have helped us understand their interests, and define possible route options. page 16
Stakeholder and Community Engagement We understand that the trust and support of the people who live and work near the proposed pipeline routes, local governments and landowners is earned, and that s why we re committed to building long-term relationships. TransCanada believes in engaging with stakeholders often to: Provide timely and accurate information; Gather input and ideas; Identify concerns; Find positive solutions. Since January, when the project was announced, our engagement activities have included: Open houses, face-to-face meetings, presentations, project email, a toll-free line and website; Involvement in project-specific initiatives such as field studies, collecting and incorporating traditional ecological knowledge in environmental studies, and traditional land use studies; Employment and contracting opportunities; Investment in community-based activities; Participation in the regulatory process. The original corridor outlined when the project was announced in January has radically changed as a result of the feedback we have received, and environmental, economic and constructability considerations. Our engagement will continue throughout the life of the project. page 17
Our Commitment to Landowners We recognize that landowners have a right to know, and want to understand, what is occurring on or near their land. We want them to know what we re proposing and how they can participate in the process. At Prince Rupert Gas Transmission, we are committed to treating all landowners who may be affected by our project honestly, fairly and with mutual respect. All landowners will receive fair and equitable compensation for the land easements granted. TransCanada works closely with landowners with landowners to identify special circumstances, land restrictions, access routes, timing and other construction requirements to minimize disturbance to the land, the landowner and the environment. page 18
Community Investment We believe in making a positive difference in the lives of others through investing in our communities, with one goal in mind: creating a brighter future. Through investments in the communities where we live and work, we are forging meaningful partnerships that serve as community assets in empowering individuals and building strong communities. We continuously demonstrate our commitment to being a good neighbour, a strategic community partner and an employer of choice. Our commitment to building strong communities and strong relationships with Aboriginal groups and community members also serves as a sound business management practice, helping to maximize our competitive strength and enduring value. page 19
What is the Lifespan of a Pipeline? Properly constructed and maintained pipelines can provide safe reliable service indefinitely. Why or when do we consider pipeline abandonment? The pipeline has not been in operation for a sustained period of time due to reduced demand for commodity volumes. TransCanada has identified the facilities for retirement due to age, obsolescence, etc. Abandonment methods: abandon in place abandon in place with special treatment (e.g. fill with concrete, cut and cap etc.) removal These methods are driven by the category of land where the pipeline is situated. The appropriate methodology is also determined by considering environmental impact, safety issues and economic efficiency. What s involved? Environmental Assessment Stakeholder and Aboriginal Engagement Regulatory Approval Clean the line Cut and cap the line Removal of above-aground facilities Removal of concrete foundations to below grade Site remediation and reclamation Monitoring period page 20