Drilling successes in a British Columbia (BC) sweet spot of the most accessible northern shale gas deposit is propelling a new expansion project by TransCanada Corp.’s western pipeline network.

TransCanada subsidiary Nova Gas Transmission Ltd. (NGTL) is proposing a C$470 million (US$352 million) addition for production from a rich zone in the Montney geological formation known as Tower Lake.

In a construction application to the National Energy Board (NEB), NGTL observes that the supply source for its proposed Towerbirch Expansion is only 3.5% of BC’s share in the Montney region, which straddles the BC-Alberta boundary.

But the planned facilities are supported by eight-year contracts to deliver 590 MMcf/d of gas for an international partnership developing a 414-square-kilometer (160-square-mile) spread of Tower Lake drilling rights.

The shale gas sweet spot is west of the southernmost leg of Alaska Highway between Dawson Creek and Fort St. John. The 87-kilometer (52-mile) Towerbirch route parallels the northeastern BC road, then veers east to NGTL’s main network in Alberta.

“The Montney play, which was formerly characterized as tight and uneconomic, has been successfully commercialized with the application of horizontal drilling and multi-stage hydraulic fracturing,” NGTL’s construction application said.

“The Montney formation holds one of the largest unconventional gas resources in North America and is one of the most economic formations in the Western Canada Sedimentary Basin, with production reaching approximately 3 Bcf/d in just a few years.”

The Tower Lake producers are prime drivers of the increasing output. The Towerbirch Expansion gas delivery contracts are held by a venture called the Cutbank Ridge Partnership, owned 60% by Encana Corp. and Japan’s Mitsubishi Corp.

Unlike other big items on the TransCanada-NGTL growth agenda, the Towerbirch line is scheduled for immediate construction to go into service by Nov. 1, 2017 regardless of the fate of BC liquefied natural gas export terminal proposals.

Along with migration of supply development to the Canadian industry’s “near frontier” of BC shale areas, the Towerbirch project highlights rising demand by Alberta thermal oilsands extraction plants.

While aging Alberta wells continue natural depletion, NGTL forecasts that Tower Lake production will quadruple in 10 years by rising to 1.2 Bcf/d as of 2025 from 300 MMcf/d. The compact area already has 9.5 Tcf of reserves recoverable by the current stage of evolving Canadian fracking technology, NGTL said.

Over the same period, total Alberta consumption is projected to climb by nearly 50% to 6.94 Bcf/d from 4.67 Bcf/d.

During 2015-2025 gas purchases by still-growing oilsands operations are forecast to jump by 91% to 3.56 Bcf/d from 1.86 Bcf/d.

Purchased gas as fuel for steam heat-driven production systems accounts for about 70% of bitumen plant fuel consumption recorded by the Alberta Energy Regulator. The total, currently forecast to hit 5.1 Bcf/d in 10 years, also includes gas byproducts of the oilsands process and fuel used production site power stations.

“Oilsands demand continues to be a strong market,” NGTL said. TransCanada’s western network is also working on facilities additions for northern Alberta projects that began before the current low on the oil price cycle and aim to outlast the slump.