Simcoe gas producer scores win at OEB

WALSH – A local resource firm has claimed a major win over a multinational energy distributor.The Ontario Energy Board has ruled that Metalore Resources of Simcoe can run an 800-metre pipeline to the 31,000-square-foot New Leaf cannabis-production facility near Walsh for the provision of natural gas.In its decision, the OEB acknowledges that Enbridge Gas has the permits to do the job.However, the OEB has given the greenlight to Metalore “because of the significantly higher cost if Enbridge Gas were to provide the service to New Leaf versus Metalore.”Tuesday, Metalore president and CEO Armen Chilian said the ruling represents a sea-change in the OEB’s thinking and is potentially precedent-setting.Chilian says the decision may create a host of new opportunities for smaller resource companies in Ontario to compete for local contracts.“The OEB is saying ‘This is what we want,’” Chilian said. “’We want additional gas extended into rural Ontario where it is needed.’”Metalore is listed on the Toronto Stock Exchange’s Venture Exchange under the heading MET.Metalore has been in the natural gas business since 1965. It operates about 80 wells, most of which are located in the former Charlotteville Township. Metalore also maintains 70 kilometres of pipeline and collects regular payments from 150 customers.The New Leaf facility is under construction at 1195 Charlotteville Road 5. Metalore offered to hook the plant up to a gas well 800 metres away at a cost of $150,000. This compares with a price of $2.3 million quoted by Enbridge Gas.Metalore’s price was lower because it has infrastructure in the immediate area. Enbridge does not.“Metalore believes the decision represents a win for Ontario natural gas producers who may now be encouraged to apply for a (permit) in their particular area and thereby expand gas service in rural Ontario,” Metalore said in a news release Tuesday.In supporting documents filed with the OEB, Metalore said awarding it the contract would produce benefits all around.“The granting of a certificate is in the public interest as favoured by economics, the complete absence of environmental impacts, no outstanding landowner issues since Metalore already pays royalties on gas leases in the area, no adverse impact on other ratepayers, and Metalore is a competent builder and operator of the proposed gas supply works,” the brief says.Widening the field to other players has potential implications for outstanding issues in the local area. One of these is the absence of natural gas infrastructure in Turkey Point.The former Union Gas and Norfolk County partnered on a funding application to the provincial government in 2017 to extend a pipeline from St. Williams into Turkey Point. That application was rejected. Jan. 1 of this year, Union Gas and Enbridge Gas merged operations.Chilian was asked Tuesday whether Metalore is in a position to take on the job in Turkey Point. He said no, adding this would be more than his company could handle all at once.“We’re a small, local producer,” Chilian said. “We cannot take on hundreds of new customers. We’d have to add new gas wells, and they’re expensive.”Chilian added an urban posture would create expensive new costs, among them insurance, easements and [email protected] read more