Spectra Energy Midstream Canada Partner Corporation 2016 Application for Approval to Reactivate the Pesh Creek Pipeline and Pesh Creek Loop

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1 APPLICATION Spectra Energy Midstream Canada Partner Corporation 2016 Application for Approval to Reactivate the Pesh Creek Pipeline and Pesh Creek Loop Spectra Energy Midstream Canada Partner Corporation, as general partner for Spectra Energy Midstream Canada L.P., (SEMC) hereby applies to the National Energy Board (NEB) pursuant to section 45 of the National Energy Board Onshore Pipeline Regulations (OPR) to reactivate the following pipelines: The 16.5 km mm OD x 6.4 mm WT, Gr. 359 Pesh Creek Pipeline (Pesh Pipeline). The 16.5 km mm OD x 6.35 mm WT, Gr. 359 Pesh Creek Loop (Pesh Loop). On November 10, 2016, SEMC entered into an agreement to sell, and for Canadian Natural Resources (CNR) to purchase, the Pesh Pipeline and Pesh Loop (Pipelines). Accordingly, by separate application filed simultaneously, SEMC and CNR are applying for leave to transfer ownership of the Pipelines from SEMC to CNR pursuant to paragraphs 74(1)(a) and (b) of the National Energy Board Act. Reactivation of the Pipelines would be carried out by CNR after the close of the purchase and sale transaction, which is conditional upon receipt of NEB approval of this reactivation application and leave to transfer the Pipelines. BACKGROUND The Pesh Pipeline was constructed in 1996 pursuant to NEB Order XG-N The Pesh Loop was constructed in 2005 pursuant to NEB Order XG-Z The Pipelines are each approximately 16.5 km in length, with approximately 16.4 km located in British Columbia (BC) and 0.1 km located in Alberta (AB). They both commence at kp 0.0 at d-83-c/94-p-8 (BC) and terminate at kp 16.5 at W6M (AB). The Pipelines have been maintained in a deactivated state since January 2013 pursuant to NEB Order MO The Pipelines have a maximum operating pressure (MOP) of 1,440 psi (9,930 kpa), are designed to transport sweet sales natural gas, and have an extruded polyethylene coating. PROJECT DESCRIPTION The work related to the proposed reactivation of the Pipelines includes swinging of blinds and reinstallation of a valve to connect to the NOVA Gas Transmission Ltd. (NGTL) North Shekilie River (NSR) meter station located at W6M. The anticipated cost of the work is approximately $10,000. All pig sending and receiving barrels for the Pipelines were left in place following deactivation. The Pipelines are expected to return to active operation when NGTL reactivates the NSR meter station, currently targeted for April 1, The Pipelines will again transport sweet sales natural gas. A location map and schematic are enclosed as Attachment 1. OPERATIONS AND MAINTENANCE Upon reactivation, operation and maintenance of the Pipelines will be carried out pursuant to the OPR and the Canadian Standards Association (CSA) Z662. Cathodic protection has been and will continue to Spectra Energy Midstream Canada Partner Corporation Page 1 of 6

2 Application for Reactivation of Pesh Creek Pipeline and Pesh Creek Pipeline Loop be maintained on the Pipelines. The Pipelines will be patrolled to monitor for geotechnical and other potential issues. Aerial patrols will occur between July 15 and February 15 so as not to impact the boreal caribou calving season. Records for the Pipelines have been and will continue to be maintained in accordance with the OPR for the life of the Pipelines. Please see Attachment 2 for the Engineering Assessment demonstrating the Pipelines fitness for service. CODES AND STANDARDS The Pipelines will be reactivated in accordance with CSA Z and the OPR. PROJECT JUSTIFICATION As part of the Purchase and Sale Agreement, CNR requires the Pipelines to be reactivated. CNR has also purchased the associated facilities that are regulated by the BC Oil and Gas Commission (BCOGC) in addition to the Pipelines. By purchasing the Pipelines and associated facilities, it is expected that the economic life of the field will be extended. COMMERCIAL THIRD PARTIES After reactivation, the Pipelines will deliver to NGTL s NSR meter station. NGTL has been consulted and no concerns regarding the reactivation have been raised. ALTERNATIVES CONSIDERED No alternatives were considered. LAND MATTERS The Pipelines are located in a remote area of northeast BC and northwest AB, approximately 250 km northeast of Fort Nelson, BC and 170 km northwest of Rainbow Lake, AB. Development in the area is predominantly related to the oil and gas industry. The nearest permanent resident is approximately 65 km from the Pipelines. Reserve or Protected Lands The Pipelines are not located within the Agricultural Land Reserve, an Ecological Reserve or a Protected Area. However, the Pipelines are located within a Caribou Protection Area (AB) and the area managed by the Fort Nelson Land Resource Management Plan (BC). Access Access to the Pipelines for the purposes of the reactivation will be by CNR right-of-way, high grade petroleum development roads, and winter roads. Land Rights The Pesh Pipeline has a 15 m statutory right-of-way registered as PS14092 in BC and PLA in AB. The Pesh Loop has a 15 m statutory right-of-way registered as BB in BC and PLA in AB. Spectra Energy Midstream Canada Partner Corporation Page 2 of 6

3 Application for Reactivation of Pesh Creek Pipeline and Pesh Creek Pipeline Loop The Pipelines right-of-ways are located entirely on provincial Crown land and will be transferred to CNR at closing of the purchase and sale transaction. PUBLIC CONSULTATION Due to the small scale and localized nature of the reactivation work (entirely within previously disturbed existing right-of-way) and its anticipated negligible environmental and socio-economic effects, SEMC carried out a focused consultation program. While impacts to traditional use activities are not anticipated, the Project is located within the asserted traditional territories of the Fort Nelson First Nation (FNFN) and Dene Thá First Nation (DTFN). As a result, SEMC sent information packages on November 14, 2016 to the FNFN, the DTFN and the trapline holders (No. TRO755T015 (BC) and No. TPA 99 (AB)), informing them of the proposed applications to the NEB. Westcoast will work to address any concerns that may be raised. ENVIRONMENTAL AND SOCIO-ECONOMIC MATTERS Due to the small scope and localized nature of the reactivation work, environmental and socio-economic impacts are expected to be negligible and effectively mitigated. The environmental and socio-economic effects were considered by the NEB in the 1996 and 2005 applications to construct the Pipelines and approved by NEB Orders XG-N and XG-Z The scope of the reactivation work is similar to that of routine operations and maintenance work. Potential Adverse Effects No new clearing, removal of vegetation or ground disturbance will be required to complete the reactivation work. It is not anticipated that any excavations will be required. Secondary containment will be used to prevent any liquids from contacting the ground. Sensory disturbances to wildlife in the area from noise and increased traffic will be short term, localized and low in magnitude. No significant cumulative adverse effects are expected to result from reactivation of the Pipelines. Mitigation All reactivation work will be performed by CNR in accordance with CNR s existing programs that address environmental management practices for impacts on biophysical parameters and provide contingency plans for events such as spills. CNR s management system will coordinate the following five programs, in accordance with sections 6.1 to 6.6 of the OPR: Emergency Management Program and Safety Management Program Integrity Management Program Security Management Program Environmental Protection Program Socio-Economic Effects Reactivation of the Pipelines is not expected to have any significant adverse socio-economic impacts because the associated work will be of small scale, short duration and will be performed entirely on previously disturbed lands. Spectra Energy Midstream Canada Partner Corporation Page 3 of 6

4 Application for Reactivation of Pesh Creek Pipeline and Pesh Creek Pipeline Loop Biophysical and Socio-Economic Elements and Considerations Table 1 summarizes the biophysical and socio-economic elements and considerations for the reactivation of the Pipelines. Table 1. Summary of Biophysical and Socio-economic Elements and Considerations Biophysical and Socio-Economic Elements Physical Environment Soil and Soil Productivity Vegetation Water Quality and Quantity Fish and Fish Habitat Wetlands Wildlife and Wildlife Habitat Species at Risk or Species of Special Status Air Quality Acoustic Environment Summary of Considerations The reactivation work will be carried out entirely within the existing right-of-way for the Pipelines. It is not anticipated that any excavations will be required. No disturbance to vegetation is anticipated. No work will occur within 30 metres of a water body. Reactivation work is planned to occur during the winter and access along the winter road uses a temporary bridge to span the watercourse. No work will occur within 30 metres of a water body. The work will be within 30 m of a wetland (as defined by the NEB), but will be contained on previously disturbed lands, with mitigation implemented in accordance with CNR s management system programs outlined above. Reactivation work will result in a small, short term increase in noise levels (i.e., sensory disturbances). No new access is required. No species at risk or critical habitat for plant and wildlife species considered to be of ecological, economic or human importance occur at the work sites. A review of flora and fauna species at risk and species of special concern was undertaken and it was determined that the risk of disturbance to any plants or wildlife is low. Minor vehicle exhaust and emissions will occur during the reactivation work. Noise generated by reactivation work will be short term, localized and low in magnitude and associated primarily with vehicle traffic. Human Occupancy and Resource Use Heritage Resources Not applicable. The reactivation work will be performed on existing and previously disturbed right-of-way. The reactivation work will be performed on existing and previously disturbed right-of-way. Spectra Energy Midstream Canada Partner Corporation Page 4 of 6

5 Application for Reactivation of Pesh Creek Pipeline and Pesh Creek Pipeline Loop Biophysical and Socio-Economic Elements Traditional Land and Resource Use Social and Cultural Well-Being Human Health and Aesthetics Infrastructure and Services Employment and Economy Summary of Considerations The reactivation work does not require new access, construction or disturbance outside of the existing right-of-way. The reactivation work will be performed entirely on existing previously disturbed right-of-way. The reactivation work will require minimal manpower and will be of short duration. There will be no impact to the regional water quality and quantity. There will be no sustained impact to the air quality in the region. There will be minimal increase in noise levels, only during the occasional maintenance activity. There will be no increase in odours, vibrations, electrical charges and no negative impacts to visual aesthetics. The reactivation work will result in minimal increased demand for local or regional public services, if any. The reactivation work has a limited scope and manpower requirements and therefore will not impact local and regional employment. Spectra Energy Midstream Canada Partner Corporation Page 5 of 6

6 Application for Reactivation of Pesh Creek Pipeline and Pesh Creek Pipeline Loop Attachment 1 Project Location Map and Schematic M0064-SK01 Spectra Energy Midstream Canada Partner Corporation Attachment 1

7 Project Area

8 After Reactivation Before Reactivation

9 Application for Reactivation of Pesh Creek Pipeline and Pesh Creek Pipeline Loop Attachment 2 Engineering Assessment Spectra Energy Midstream Canada Partner Corporation Attachment 2

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