CALGARY - The National Energy Board has rejected the 97-kilometre Komie North natural gas pipeline proposed by a subsidiary of TransCanada Corp. (TSX:TRP) in northeastern British Columbia because it wasn't convinced the project would be economically feasible.
The NEB said in a release Wednesday it won't recommend that Ottawa approve the Komie North section of the Horn River Mainline extension, 110 kilometres north of Fort Nelson, B.C.
The energy watchdog said it determined the toll treatment — how customers are charged for shipping their gas through the pipe — was "inappropriate."
The board said Nova Gas Transmission Ltd. did not provide any alternatives for it to consider.
"Given the board's conclusion with respect to the toll treatment for the Komie North section, the board was not persuaded that the Komie North section was economically feasible," the NEB said in a release.
"The board also concluded that approval of the Komie North section, as proposed, would have negative commercial impacts on other parties."
It also said building the Komie North section would be "premature," since it's not clear there's currently a need for a pipeline that size in the region.
The board did, however, sign off on a smaller pipeline project — a 33-kilometre loop called the Chinchaga section — in northwestern Alberta that's part of the same broader $333.2-million expansion plan.
On its website, TransCanada said the in-service date for the Komie North project has been delayed a year until April 2015 "due to customer requests."
The Chinchaga section is expected to start up in April 2014.