Pipeline Profiles: Westcoast Transmission System

Sources: Westcoast Energy Lnc., NEB

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Westcoast Energy Inc., carrying on business as Spectra Energy Transmission, owns the Westcoast Transmission System (Westcoast). The Westcoast Pipeline extends from points in Yukon, the Northwest Territories, Alberta and British Columbia, to the Canada/U.S. border near Huntingdon, British Columbia. At the border Westcoast connects to Williams Northwest Pipeline, which supplies natural gas to the U.S. Pacific Northwest. The Westcoast Pipeline connects to the NOVA Gas Transmission Ltd. (NGTL) at two points: NOVA/Gordondale and Sunset Creek.

Huntingdon Export and Fortis BC Lower Mainland points are at the same location on the Canada/U.S. border near Huntingdon, British Columbia. In 2016, at this shared location, capacity averaged 45.56 million cubic metres per day (1.61 billion cubic feet per day). Throughput at Huntingdon Export averaged 30.67 million cubic metres per day (1.08 billion cubic feet per day). Throughput at Fortis BC Lower Mainland averaged 9.19 million cubic metres per day (0.32 billion cubic feet per day). The overall combined average utilization in 2016 was 87%.

Huntingdon Export and Fortis BC Lower Mainland points are at the same location on the Canada/U.S. border near Huntingdon, British Columbia. Flows measured at Huntingdon Export are exports. Flows measured at FortisBC Lower Mainland are intra-Canada. The Fortis BC Lower Mainland point is comprised of several delivery meters located between Hope and Huntingdon in British Columbia.

In 2016, east-bound flow capacity at Kingsvale averaged 2.97 million cubic metres per day (0.11 billion cubic feet per day) and throughput averaged 0.5 million cubic metres per day (0.02 billion cubic feet per day). The average utilization of Kingsvale in 2016 was 18%. In 2016, west-bound flow capacity at Kingsvale averaged 2.97 million cubic metres per day (0.11 billion cubic feet per day) and throughput averaged 0.93 million cubic metres per day (0.03 billion cubic feet per day). The average utilization of Kingsvale in 2016 was 27%.

Flows measured at Sunset Creek are intra-Canada. The Westcoast Pipeline connects with the NGTL system at Sunset Creek.

In 2016, capacity at Sunset Creek averaged 14.67 million cubic metres per day (0.52 billion cubic feet per day) and throughput averaged 7.92 million cubic metres per day (0.28 billion cubic feet per day). The average utilization of Sunset Creek in 2016 was 54%.

Flows measured at Kingsvale are intra-Canada. The Westcoast Pipeline connects to FortisBC-operated Southern Crossing Pipeline near Kingsvale, British Columbia. Kingsvale is a bidirectional point.

In 2016, east-bound flow capacity at NOVA/Gordondale averaged 10.9 million cubic metres per day (0.38 billion cubic feet per day) and throughput averaged 2.72 million cubic metres per day (0.1 billion cubic feet per day). The average utilization of NOVA/Gordondale in 2016 was 26%. In 2016, west-bound flow capacity at NOVA/Gordondale averaged 7.85 million cubic metres per day (0.28 billion cubic feet per day) and throughput averaged 0 million cubic metres per day (0 billion cubic feet per day). The average utilization of NOVA/Gordondale in 2016 was 0%.

Flows measured at NOVA/Gordondale are intra-Canada. The Westcoast Pipeline connects to NGTL at NOVA/Gordondale. Nova/Gordondale is a bidirectional point.

The physical capacity of a pipeline is based on many factors such as the product(s) being carried, direction of flow, ambient temperature, pipeline compression, and maintenance work or other pressure restrictions. The operational capacity at each key point may also reflect contracts for transportation service, and supply and demand across the system. The actual physical capacity of the pipeline may be higher than the assumed operational capacity stated here.

Open data can be freely used, modified and shared by anyone for any purpose. The data for these graphs are available here.

Key Developments

Last updated: August 2016

Westcoast submitted two applications to the Board that would provide additional firm service in the Peace River area of BC. The Jackfish Lake Expansion Project was approved by the Board on 15 July 2016. The High Pine Expansion is still before the Board.

Regulatory Documents

Last updated: August 2016

Tolls

Last updated: August 2016

Westcoast transmission services are tolled according to the terms of a negotiated settlement, which uses a cost of service framework. Westcoast operated under toll settlements from 2011 to 2015.

Figure 1 shows the Westcoast benchmark tollFootnote 1 (Firm Transportation Service – T-South, 2-year contract delivered to the Huntingdon Delivery Area) and the GDP deflator (normalized) for 2010-2015. The benchmark toll moved in line with the GDP deflator from 2010 to 2013 and increased in 2014 due to forecasts of lower throughput and costs associated with added facilities such as its North Montney project and the T-North Expansion. Actual throughput was higher than expected in 2014 so the extra revenue was applied to tolls in 2015. Along with higher forecast throughput for 2015, this resulted in lower tolls in 2015.

Figure 1: Westcoast Benchmark Toll

Figure 1: Westcoast Benchmark Toll

Sources: NEB toll filings and NEB calculations

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This graph shows the Westcoast benchmark toll as a solid red line and the GDP deflator as a black dashed line. The benchmark toll was aligned with the GDP deflator from 2010 through 2013. It increased to $0.54 in 2014 and decreased to $0.37 in 2015.

Financial

Last updated: August 2016

Westcoast Energy Inc.’s revenue, net income, and rate base have been growing due to system expansions and increased throughput. Coverage ratios continue to be stable and credit ratings are investment grade.

Table 1: Westcoast Energy Inc.
Westcoast Energy Inc. 2010 2011 2012 2013 2014 2015
Revenues (millions) – Westcoast Transmission $295.7 $322.9 $325.0 $396.6 $384.8 $393.8
Net Income (millions) – Westcoast Transmission $35.1 $46.1 $49.6 $53.1 $53.9 $50.6
Rate Base (millions) – Westcoast Transmission $1 092.9 $1 074.3 $1 223.9 $1 349.1 $1 346.4 $1 346.9
Deemed Equity Ratio – Westcoast Transmission 36% 40% 40% 40% 40% 40%
Achieved Return on Equity – Westcoast Transmission 8.78% 10.01% 9.36% 9.54% 9.89% 9.01%
Interest and Fixed-Charges Coverage RatioTable Note a 2.31 2.52 1.96 2.21 2.17 3.46
Cash Flow to Total Debt and Equivalents RatioTable Note a 17.2% 15.4% 13.7% 15.1% 16.0% 20.3%
DBRS Credit RatingTable Note b A (low) A (low) A (low) A (low) A (low) A (low)
S&P Credit RatingTable Note b A- BBB+ BBB+ BBB BBB BBB

 

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