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Canada's NEB Authorizes New Path for NGTL to Bring More NatGas to Western U.S.

A surge of northern shale gas is scheduled to reach California, Oregon and Nevada this spring after swift construction was authorized for a new path across TransCanada Corp.’s western supply collection network, Nova Gas Transmission Ltd. (NGTL).

The National Energy Board (NEB) granted industry requests for early January approval that enables NGTL to hit an April target for completing the 2.6 Bcf/d project launched last year, named the Sundre Crossover after a nearby town in west-central Alberta.

The addition is designed to flow growing production from the Montney Shale, straddling northern British Columbia (BC) and Alberta, into the Gas Transmission Northwest and Foothills Pipelines export conduits to the western United States.

For a construction project, the Sundre Crossover is modest at a cost of C$99 million ($79 million) and includes a 12.6-mile installation. But producers booked delivery capacity for flows to start at 233 MMcf/d. NGTL sized the line for traffic to swell into much greater volumes by using 42-inch diameter pipe.

Initial customers Arc Resources, Encana Corp., NuVista Energy and Tourmaline Oil told the NEB that the Sundre Crossover would make a big contribution to the Western Canadian gas and byproducts supply industry.

ARC described the NGTL addition as “critical infrastructure” for developing the Montney formation as “one of the largest and most prolific areas in North America.”

ARC said “export pipelines and egress out of the Montney region and beyond the Western Canada Sedimentary Basin would ensure that Canadian assets remain competitive across North America, as the U.S gas supply continues to grow, and preserve our market share.”

Tourmaline told the NEB that “this project is beneficial for the entire Western Canada natural gas industry as it provides an optimal solution to improve Canada’s competitiveness by moving Western Canadian supply to the markets in Oregon and California.”

Encana agreed, saying that from a “commercial perspective this project is an important expansion of the NGTL system. The Sundre Crossover provides timely and economic pipeline capacity to downstream markets that are currently constrained.”

In the chorus of support for the Sundre path before the NEB, NuVista added that “while it is a relatively small project in the context of a system that transports gas over 2,000 kilometers (1,200 miles) from northern Alberta and BC to California, it is a key link to enabling additional exports and utilizing this entire route.”

The producers and NGTL said their April target for starting Sundre deliveries would enable increased exports of northern BC and Alberta gas to fulfill demand for power plant fuel during the American air conditioning season.

“The summer season is a critical time for natural gas producers since it is a low demand period in Canada and the western U.S. is a key summer market for Canadian gas,” NuVista said.

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