Feedstock Pipeline Inlets

A feedstock pipeline inlet is a natural gas meter station located in B.C. where natural gas is provided for delivery to an LNG facility. A feedstock pipeline inlet is part of a feedstock pipeline. The meter station includes all components of the natural gas meter station including, if applicable, the flange located on the upstream side of the meter station where natural gas enters the natural gas meter station. Where the feedstock pipeline is directly connected to the Nova Gas Transmission Ltd. (NGTL) system, the meter station that is at the NGTL delivery point and is part of the NGTL system is considered to be part of the feedstock pipeline.

A feedstock pipeline is a natural gas pipeline or series of pipelines used to transport natural gas from the feedstock pipeline inlet to an LNG facility inlet meter. The feedstock pipeline commences at the feedstock pipeline inlet and ends at the point immediately before the LNG facility inlet meter.

Determining the Location of the Feedstock Pipeline Inlet

The feedstock pipeline inlet for each LNG facility will be designated by regulation. The relevant feedstock pipeline inlet will be designated based on the following considerations:

If natural gas is delivered to an LNG facility by a feedstock pipeline that is connected to:

  1. The NGTL System - the natural gas meter that is the delivery point where natural gas exits the NGTL System and enters another pipeline
  2. Both the NGTL System and the Spectra System where the Spectra System is not required to supply the feedstock pipeline - the natural gas meter that is the delivery point where natural gas exits the NGTL System and enters another pipeline (see Figure 1)
  3. Both the NGTL System and the Spectra System where the NGTL System is not required to supply the feedstock pipeline - Spectra Compressor Station No. 2 (see Figure 2)
  4. Only to the Spectra System - Spectra Compressor Station No. 2 on the Spectra System
  5. Neither the NGTL System or the Spectra System and directly from a natural gas field - the feedstock pipeline inlet will be a meter station in the upstream near the natural gas field and will be determined on a case-by-case basis

If there is more than one feedstock pipeline delivering natural gas to a single LNG facility, one feedstock pipeline inlet on each feedstock pipeline will be designated for that LNG facility.

Feedstock Spur Pipeline

A feedstock spur pipeline is part of the feedstock pipeline. A feedstock spur pipeline is a natural gas pipeline connecting the main feedstock pipeline to the LNG facility. A feedstock spur pipeline commences at the feedstock spur pipeline inlet and ends immediately before the LNG facility inlet meter. If the feedstock pipeline delivers natural gas directly to the LNG facility, there may be no feedstock spur pipeline. In all cases, a feedstock spur pipeline inlet will include a natural gas meter station.

A feedstock spur pipeline inlet is a location, designated by regulation, on a feedstock pipeline. It is the start of the feedstock spur pipeline.

Significance of the Feedstock Spur Pipeline

A feedstock spur pipeline is capital investment property. The capital cost of the feedstock spur pipeline may be included in your capital investment account for the LNG facility. The cost of that portion of the feedstock pipeline that is not a feedstock spur pipeline is not capital investment property.

The feedstock spur pipeline is not part of the LNG plant or LNG facility. Purchases and sales of natural gas in the feedstock spur pipeline are not liquefaction activities; therefore, the income from those transactions is not subject to LNG income tax.

Figure 1 – Feedstock Pipeline Inlet Designation (NGTL)

Figure 2 - Feedstock Pipeline Inlet Designation (Spectra)