Seven Generations Energy Ltd. (7G) announced Monday that it has entered into an agreement with two divisions of Tenaska, one of the top five natural gas marketers in North America, over the management of 7G's growing natural gas transportation capacity to the Midwest via the Alliance Pipeline system.
Over the next three years, 7G's transportation capacity on Alliance -- a pipeline that carries about 1.6 Bcf/d of liquids-rich gas from northern British Columbia and Alberta to the Chicago market hub -- is to grow incrementally. Transportation agreements with Calgary-based 7G will allow the company to start flowing 250 MMcf/d of rich gas on Dec. 1, increasing in steps to reach 500 MMcf/d in 2018.
Under the agreement, Tenaska Marketing Canada and Tenaska Marketing Ventures will manage the day-to-day capacity and transportation of 7G's rich gas on Alliance from 7G's Kakwa River project, which is located in northwest Alberta.
"Tenaska is a leading North American energy firm with the gas marketing expertise and market connections to help optimize the value of our growing sales in the U.S. Midwest," Pat Carlson, 7G's CEO, said in a statement. "This arrangement will strengthen our ability to market natural gas in one of the continent's largest energy markets."
Last month, Canada's National Energy Board (NEB) gave Alliance permission to perform a service overhaul (see Daily GPI, July 10). Specifically, NEB authorized Alliance to implement, among other things, the carriage of ultra-rich gas, shortened transportation contracts, and the addition of a digital trading floor.
Early indications are Alliance will run at full capacity after the overhaul. During 13 months of regulatory review, Alliance booked nine-tenths of its capacity through contract negotiations.