GAZIFÈRE INC. DEMANDE D’AUTORISATION PRÉALABLE REINFORCEMENT – CHEMIN PINK DESCRIPTION DU PROJET ET INFORMATION TECHNIQUE 1. Project Objectives Gazifère Inc. supplies natural gas to the West End of Gatineau through a NPS 6 steel high-pressure pipeline along chemin d’Aylmer. The distribution system in the West End of Gatineau has seen rapid growth over the past years and is anticipated to continue to grow at a similar pace. As a result, the demand will quickly exceed the supply capacity of the existing high-pressure infrastructure. Consequently, the high-pressure system feeding the West End of the City of Gatineau requires reinforcement to be able to deliver the additional load demand anticipated for the 2010 / 2011 heating season. Gazifère proposes to reinforce the existing high-pressure system by installing 2,800m of NPS 8 steel gas main along Chemin Pink, 1,650m of NPS 8 steel gas main on Chemin Klock, 24m of NPS 6, 76m of NPS 8 and 50m of NPS 12 steel gas main on Chemin Antoine-Boucher. Gazifère is also proposing the installation of a new district station on Chemin Antoine-Boucher at Chemin Klock. This will provide a fourth feed to the NPS 6 steel main on Chemin d’Aylmer, by connecting the NPS 8 main along Chemin Pink to the NPS 8 steel main on Chemin Vanier, resulting in the introduction of supply to the northern sector thereby reducing the load on the existing station, Aylmer district located at Rue Principale and Boul. Wilfrid Lavigne in Gatineau. We anticipate, based on our forecasts, that this work will extend the useful life of the existing Gatineau system for the next 5 years after which time a more extensive solution must be considered. The future work will likely consist of providing a western feed for the system through a third river crossing from the Ontario distribution system of Enbridge Gas Distribution Inc in 2015 depending on organic growth and customer consumption. The work proposed in this filing will ultimately form part of the future river crossing system feed. 2. Project Description 2.1. Pipeline Routes (see exhibit GI-1, documents 2 & 2.1) The proposed reinforcement main is a new 8 inch steel pipeline that will tie-in to an existing 8 inch steel main on Chemin Pink at Chemin Vanier and to an existing 6 inch Plastic main on rue Pierre de Bain. Original : 2010-02-16 GI-1 Document 1 Page 1 de 7 Requête 3722-2010 GAZIFÈRE INC. DEMANDE D’AUTORISATION PRÉALABLE REINFORCEMENT – CHEMIN PINK DESCRIPTION DU PROJET ET INFORMATION TECHNIQUE 2.2. Operating Pressure The proposed NPS 8 steel high pressure main will have a normal operating pressure of 1207 kPa (175 psig.) corresponding to the maximum operating pressure of the existing Gazifère high-pressure network, but will be tested and rated to operate at 3240 Kpa (470 psig) corresponding to the proposed operating pressure of the future River crossing. 2.3. Project Schedule Construction is anticipated to begin in June 2010, and should be completed by October 2010. 2.4. Pipeline Lengths The pipeline lengths of the proposed steel high pressure main are as follows: Street Pipe length Chemin Pink 2,800m Chemin Klock 1,650m Chemin Antoine-Boucher 150m Total 4,600m 3. Project Justification The Gazifère high pressure network ends at the Aylmer District station, which, along with regulating stations at Chemin McConnell and Chemin Vanier as well as Chemin Rivermead and Chemin d’Aylmer, reduces the gas pressure (from high pressure to intermediate pressure) for distribution throughout the West End of Gatineau. Of the three stations, the Aylmer district station currently supplies 63% of the demand for the western sector of our system. In order to maintain the required outlet pressure for the west distribution system, a minimum inlet pressure of 700 kPa (100 psig) is required into the station. Original : 2010-02-16 GI-1 Document 1 Page 2 de 7 Requête 3722-2010 GAZIFÈRE INC. DEMANDE D’AUTORISATION PRÉALABLE REINFORCEMENT – CHEMIN PINK DESCRIPTION DU PROJET ET INFORMATION TECHNIQUE The network analysis for the 2010 / 2011 heating season is forecasting inlet pressures to the Aylmer District Station to be 718 kPa (104 psig) at peak hour on a day with daily mean temperatures of –29oC and dropping to 612 kPa (89 psig) in the following heating season. The distribution system is designed for a worst case scenario where the daily mean temperature is –29oC, not including wind chill, to meet the demand load for the peak hour periods rather than annual volumes. If the peak hour periods were not met, then Gazifère would not be able to supply all of their customers during these peak times. The system minimum pressure of 700kPa (100 psig) is derived with a safety factor to ensure that all downstream requirements can be maintained during peak operating conditions, so that the risk of losing customers is minimized. The Gazifère high-pressure network is analyzed using customer consumption data from the previous heating season. The high-pressure network in Gazifère currently operates at the maximum operating pressure (MOP) of 1207 kPa (175 psig) The MOP is the highest pressure that the system can operate at, which is determined by the type of material and the test pressure used at the time the mains were installed. Therefore, additional capacity cannot be attained by elevating the operating pressure of this network. The growth that has occurred in the West End of Gatineau in the past has brought the system in this area of Gatineau to near minimum allowable pressures. The majority of the west end feed is supplied through the Aylmer district station and the ability of the pipe feeding this station has reached near capacity. Without this reinforcement, Gazifère would not be able to accommodate future growth and would be operating very near capacity for 2010 / 2011 heating season. By introducing a new station to our distribution system to the north of Aylmer district station through new pipe, we will be able to better load balance the entire network and relieve much of the load delivered through Aylmer district by distributing it to the new station. This reinforcement will provide Gazifère with the necessary means to continue uninterrupted supply to its existing firm customers as well as supply future growth in the west end of the distribution system. The reinforcement is the least disruptive and most cost effective means of continuing feed and will also benefit future reinforcement solutions which may be required, depending on customer growth and usage, in the next 5 years. Original : 2010-02-16 GI-1 Document 1 Page 3 de 7 Requête 3722-2010 GAZIFÈRE INC. DEMANDE D’AUTORISATION PRÉALABLE REINFORCEMENT – CHEMIN PINK DESCRIPTION DU PROJET ET INFORMATION TECHNIQUE 4. Project Costs The estimated project costs for the proposed reinforcement is: Item Cost Pipe and Coating $235,000 Material (valves, fittings, miscellaneous) $58,800 Construction Materials (sands, asphalt, rock $652,200 excavation etc) Construction Labour Costs $627,300 Overheads $223,500 District Station $65,000 Contingency – 4% $74,500 Total Capital Costs $1,936,300 5. Project Feasibility Study It is estimated that this reinforcement would allow an additional 2,374 residential and small commercial customers. This translates into a peak load of 5625 m3/hr. The following Table shows the projected peak load and customer count: CUSTOMER ADDITIONS & ADDITIONAL PEAK LOAD FORECASTS RESIDENTIAL COMMERCIAL Total No. of No. of Forecasted Heating customers Peak customers Peak Load Peak Load season additions Load (m3) additions (m3) m3 2009-10 Current 7393 Current 1965 9358 2010-11 450 901 12 199 10458 2011-12 462 924 12 199 11582 2012-13 476 952 12 199 12732 2013-14 489 979 12 199 13911 2014-15 437 874 12 199 14983 Original : 2010-02-16 GI-1 Document 1 Page 4 de 7 Requête 3722-2010 GAZIFÈRE INC. DEMANDE D’AUTORISATION PRÉALABLE REINFORCEMENT – CHEMIN PINK DESCRIPTION DU PROJET ET INFORMATION TECHNIQUE The net present value of this reinforcement project, taking into account these customers additions, is 2,236,718$ and the internal rate of return is 8.13%. Please refer to the financial feasibility study at exhibit GI-1, documents 3 and 3.1 6. Authorizations Required Under Other Laws The following permits / easements will be obtained prior to the construction of the proposed reinforcement: Organization Status Permits 1. Ville de Gatineau (secteur Being prepared for Aylmer) submission 2. Ministère de l’environnement et Being prepared for de la faune submission 3. Ministère des Transports du Being prepared for Québec submission 7. Impact on Rates See exhibit GI-1, documents 3.2 & 3.3. 8. Impact on the Quality of the Natural Gas Distribution System Without the installation of a reinforcement main, Gazifère will be at risk of not sustaining the required pressures to the Aylmer intermediate pressure distribution system during the 2010 / 2011 heating season peak hour demand. The proposed reinforcement will improve the reliability of natural gas delivery to the West End of Gatineau by providing a fourth feed to the north of the existing Aylmer district station. Aylmer District is currently the primary feed for the area and is near capacity. As an additional benefit, this reinforcement will also ensure that the feed to the West End of Gatineau can be sustained in the event repairs are required to a damaged gas main by balancing pressure and feed through the remaining stations. Original : 2010-02-16 GI-1 Document 1 Page 5 de 7 Requête 3722-2010 GAZIFÈRE INC. DEMANDE D’AUTORISATION PRÉALABLE REINFORCEMENT – CHEMIN PINK DESCRIPTION DU PROJET ET INFORMATION TECHNIQUE 9. Alternate Solutions Alternate routes were examined during the design stage of the proposed reinforcement.