Canada Gas Building Toward Alaska
The growth in Canada's natural gas supply is moving northward
and at some point is expected to be "within reach" of Alaska, where
the United States has "huge reserves" of gas. If this trend
continues, the still-under-construction Alliance Pipeline
conceivably one day could be transporting both Canadian and Alaskan
gas supplies, an executive with the pipeline said.
One of three schemes being considered to transport Alaska North
Slope gas to the U.S. market "potentially" could involve Alliance
in the future, noted Jack Crawford, senior vice president for
public government and regulatory affairs with the Calgary-based
Alliance. However, he said the pipeline wasn't "actively" pursing
this angle at this time, given that it's still "fully occupied"
with the construction of the Canada-to-Chicago Alliance project,
which is targeted to begin operation "full steam" next October.
Speaking at the winter meeting of the National Association of
Regulatory Utility Commissioners (NARUC) in Washington D.C. last
week, he said he doubted that Alliance would be immediately
affected by the FERC's hold-up of projects that would transport
some of Alliance's 1.3 Bcf/d of gas from Chicago to East Coast
"It may have a longer term effect, but it won't have a
short-term effect because our capacity is essentially sold out for
[the next] 15 years," Crawford told NGI. If the take-away projects
aren't certificated eventually, however, "it may delay expansions"
of the Alliance system in the future. Alliance is counting on
Vector Pipeline, which has been certificated and is under
construction, to handle much of the gas overflow.
As for the Alliance pipeline itself, which has four sponsors,
Crawford said it has incurred some construction overruns. But they
have been "very localized," occurring mostly in North Dakota, and
have been "relatively modest" in amount. The sponsors include
Coastal Corp., Williams, Enbridge Inc. (formerly IPL Energy) and
the Fort Chicago Energy Partners.
The pipeline recently began to put gas into the system, about
200 MMcf, he noted. That's just the first injection of
approximately 8 Bcf of natural gas that Alliance plans to put in
between now and next October, when it begins operation.
Crawford estimated Alliance still has about 120 miles to
construct on the U.S. side of its mainline, and about 180 miles
more to go on the Canadian side. But there's still "considerably
more work to be done" on the lateral portion of its receipt system.
Crawford said the 'biggest task...has been that of dealing with
landowners," about 6,000 of them. But he said Alliance was able to
reach voluntary agreements with all but less than 1%.
Once Alliance is operating, it's expected that Canadian gas
exports to the U.S. market will rise to between 10 Bcf/d and 12
Bcf/d in early 2001, which translates to about 4-4.5 Tcf per year.
That's compared to last October's gas export volumes of 8.9 Bcf/d.
There isn't likely to be a let-up in Canada's growth. Todd
Persells, assistant vice president for project development and
marketing at ANR Pipeline, said forecasts for 15 years out indicate
Canadian exports will grow by 25%, and Canadian production will
rise by 33%.
It's estimated Canada has "ultimate marketable potential" gas
reserves of 662 Tcf, almost half of which (350 Tcf) derive from the
Western Canada Sedimentary Basin --- where the Alliance Pipeline
originates. The estimates are from the Canadian Gas Potential
Committee and the NEB.
In the past three to four years, Canadian producers have been
adding to reserves at a rate of 4 Tcf per year. "This has been due
to mostly offshore and above-average drilling activities in the
Western Canada Sedimentary Basin," said Neil McCrank, chair of the
Alberta Energy Utilities Board, who also spoke at the NARUC