Pipeline Profiles: Maritimes & Northeast Pipeline – Canadian Mainline

Sources: Maritimes & Northeast Pipeline LP., NEB

Text version of this graphic

M&NP was commissioned in December 1999 to transport natural gas produced from the Sable Offshore Energy Project to markets in the U.S. Northeast. It currently also transports offshore natural gas from the Deep Panuke project, and supply from the McCully gas field in New Brunswick. M&NP can flow bi-directionally and natural gas will flow from the U.S. into Canada when offshore production is insufficient to meet domestic demand. Incremental supply comes from the Canaport LNG import terminal via the Brunswick Pipeline or from the Portland Natural Gas Transmission System.

In 2016, export capacity at St. Stephen averaged 13.33 million cubic metres per day (0.47 billion cubic feet per day) and throughput averaged 0.68 million cubic metres per day (0.02 billion cubic feet per day). The average export utilization of St. Stephen in 2016 was 4%. In 2016, import capacity at St. Stephen averaged 13.33 million cubic metres per day (0.47 billion cubic feet per day) and throughput averaged 0.62 million cubic metres per day (0.02 billion cubic feet per day). The average import utilization of St. Stephen in 2016 was also 4%.

Flows measured at St. Stephen are imports and exports. The Canadian Mainline segment of the Maritimes & Northeast Pipeline connects to the U.S. segment at the Canada/U.S. border near St. Stephen, New Brunswick.

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

Natural gas supply from offshore Nova Scotia declined in 2015. In mid-May, production at Deep Panuke was shut-in and Encana (the operator) announced that the project would produce only during the winter months when demand and gas prices are highest. In addition, Deep Panuke’s reserve estimate was cut by half due to higher than expected water incursion into the reservoir. Production at Sable in 2015 remained steady averaging 4 106m³/d (0.14 Bcf/d); however, the project is in long-term decline.

Regulatory Documents

Last updated: August 2016

Tolls

Last updated: August 2016

M&NP uses a ‘postage stamp’ tolling model in which the toll is the same for all paths on the system regardless of the distance travelled.  M&NP has been operating under a toll settlement for 2014-2016. Figure 1 shows M&NP’s benchmark toll (MN365 Toll) and the GDP deflator (normalized) for 2010-2015. The benchmark toll declined slightly in 2012 and 2013 due to lower revenue requirements, and in 2014 as the rate base decreased with depreciation.

Figure 1: M&NP Benchmark Toll

Figure 1: M&NP Benchmark Toll

Source: NEB toll filings

Text version of this graphic

This graph shows the M&NP benchmark toll as a solid red line and the GDP deflator as a black dashed line. The benchmark toll decreased slightly over the period from $0.76 in 2010 to $0.72 in 2015.

Financial

Last updated: August 2016

Maritimes & Northeast Pipeline L.P.’s financial ratios have improved due to the reduction of debt over time. DBRS has maintained its credit rating at “A” due to its predictable cash flows which are a result of firm transportation contracts with investment grade shippers, a backstop provided by ExxonMobil Canada, and a tolling methodology that is regulated on a cost of service basis.

Table 1: Maritimes & Northeast Pipeline L.P.
Maritimes & Northeast Pipeline L.P. 2010 2011 2012 2013 2014 2015
Revenues (millions) $140.7 $142.4 $133.3 $138.7 $141.6 $119.9
Fixed Costs (millions) $23.9 $25.1 $24.7 $23.0 $26.0 $25.9
Rate Base (millions) $591.3 $571.3 $528.0 $492.3 $445.2 $401.4
Return on Equity 6.45% 5.96% 5.55% 5.51% 6.87% 7.32%
Interest and Fixed-Charges Coverage RatioTable Note a 3.41 2.78 2.8 3.03 3.49 3.79
Cash Flow to Total Debt and Equivalents RatioTable Note a 22.2% 23.9% 25.9% 30.2% 38.8% 42.6%
DBRS Credit Rating A A A A A A
Moody’s Credit Rating A2 A2 A2 A2 A2 A2

 

Date modified: