Fuelled by economic conditions, Heritage Gas has postponed a plan to expand its distribution franchise to Antigonish town and county.
In mid-November, the Dartmouth-based company received Nova Scotia Utility and Review Board (NSURB) approval to make that move.
In its request to the provincial body, Michael Johnston – Heritage Gas director, regulatory and government affairs – wrote, “based on the latest information available on projected customer conversions to natural gas and current market conditions in Antigonish County, forecasted revenue from the project over the next few years will be lower than the initial 2014 forecast.
“As a result, Heritage Gas’ project timing for the expansion of natural gas service to Antigonish County will be delayed,” he added.
In a Nov. 22 interview, Johnston reiterated that position, while noting – as part of the conditional approval for its expansion application, in 2014, the company was required to get NSURB approval for such a move.
“It is based on the right balance between [customer] commitment and demand and cost,” he said, in outlining the postponement move.
Noting there are “many factors” involved in making a decision on feasibility, Johnston said the company will “continue to monitor and evaluate the opportunity to provide natural gas distribution service to Antigonish County.”
When Heritage Gas received its NSURB approval, almost three years ago, company officials estimated construction would begin by April 1, 2015, with the third quarter of that year targeted as the time to ‘activate the system.’
Owned by AltaGas Utility Group Inc. of Calgary, Heritage Gas formed in 2003 to operate a regulated natural gas distribution franchise in the province.
Heritage Gas has more than 350 km of pipeline in Nova Scotia, providing service to more than 5,500 customers in Halifax, Pictou County, Amherst and Oxford.
In its proposal, which includes the construction and operation of infrastructure, the company said it plans to deliver natural gas to Antigonish using compressed natural gas (CNG) technology.
The product would be compressed and loaded on specialized CNG trailers at the Heritage Gas compressor station in Aerotech Business Park, which is located near the Halifax Stanfield International Airport.
After being trucked to Antigonish, the CNG would offloaded from the trailers into a decanting station on the outskirts of town, with distribution made through a conventional pipeline system.
The Heritage Gas proposal, which carries a price tag of more than $8.5 million, includes laying 7.5-kilometres of in-ground gas pipeline in Antigonish.
In testimony during the review board’s franchise application hearing in 2014, the company indicated two anchor customers already secured would account for 35 per cent of required revenue to finance the initiative.
St. Martha’s Regional Hospital and St. F.X. – although the latter never confirmed it – were those secured anchor customers.
“We have made significant investments in the province,” Johnston said.
“When market conditions change, hopefully, our plans for Antigonish will become a reality.”