As construction is completed on pipeline additions this year, the next stage is taking shape in a multi-year program to adapt the Western Canadian natural gas pipeline grid to spreading shale production.
A new regulatory application by TransCanada Corp. is seeking C$570 million ($456 million) in pipes and compressors next year for the pipeline giant’s supply collection network in Alberta and British Columbia (BC), Nova Gas Transmission Ltd. (NGTL).
Like the C$1.3 billion ($1 billion) package now underway, the next additions respond to “a distributional shift in supply,” said the approval request by NGTL to the National Energy Board (NEB). TransCanada said late last month four of eight parts were completed in a C$1.3 billion ($1 billion) work program for NGTL delivery capacity.
Both annual capital programs are part of a C$2 billion ($1.6 billion), five-year series that TransCanada forecasts will continue through 2021 to fulfill service requests from Alberta and BC gas producers.
On top of the 2017 capacity increases of 443 MMcf/d, the 2018 installations, titled the NGTL Saddle West Expansion, are scheduled to add 362 MMcf/d as of 2019. The expansion, unveiled in late 2016, is in the Saddle Hills region 500 kilometers (300 miles) northwest of Edmonton.
Both annual programs center on liquids-rich sweet spots tapped by horizontal drilling and hydraulic fracturing in shale deposits that straddle BC and Alberta. The new shale and tight gas production replaces aging, depleting vertical wells in freely flowing geological structures.
Producers developing the Montney, Duvernay and Deep Basin formations set the five-year capital program into motion by signing more than 2.6 Bcf/d in delivery contracts, TransCanada has said.
Gas traffic interruptions for 2017 construction temporarily shrank NGTL flows by about 2 Bcf/d, or 20%, undermining spot sales volumes and prices. A monthly “outage forecast” by the pipeline grid does not yet predict effects of its proposed next work program.