It appears that TransCanada's new natural gas pipeline project across northern Alberta has confirmed that Canada will reduce its role as an international natural gas supplier in order to raise its profile in oil.
The line, which was announced late last month (see NGI, Nov. 26), will siphon off gas from northwestern Alberta and northeastern British Columbia for express fuel deliveries to thermal oilsands plants. TransCanada PipeLines Ltd. unveiled the $983 million project, called North Central Corridor, on the heels of a forecast by the National Energy Board (NEB) that bitumen belt gas consumption will nearly triple by 2015.
The schedule calls for construction to begin before the end of 2008, if approval can be obtained in time from the Alberta Energy and Utilities Board. A target of April 2010 is set for starting deliveries.
Jumbo pipe, 42 inches (105 centimeters) in diameter, is on order for the northern gas line, TransCanada communications officer Shela Shapiro said. Construction contracts will be awarded soon, she added. No single industrial customer or cluster of plants has booked up the proposed gas delivery capacity. The new line will be built to satisfy rapidly growing demand by all oilsands developers, she reported. The project is structured as an addition to the NOVA gas gathering grid spanning Alberta.
TransCanada's oilsands fuel line does not rely on the proposed Mackenzie Gas Project. Supplies will come from prolific gas fields in northwestern Alberta and northeastern British Columbia, Shapiro said.
There will be enough gas to satisfy Canadian needs despite increased consumption by oilsands plants, the NEB predicted. The pinch will be felt in the United States. Gas exports are forecast to shrink by as much as 40% over the next 10 years, from the current 8-9 Bcf/d into the 5 Bcf/d area.
The company seeks speedy regulatory approval. The proposed route, from a western inlet about 600 kilometers (360 miles) northwest of Edmonton to an eastern outlet in the heart of the bitumen belt midway between Fort McMurray and Cold Lake, follows established "infrastructure corridors" such as power lines, TransCanada said.
The project is not expected to run into any Alberta counterparts to regulatory delays that continue to plague Canada's proposed Arctic gas pipeline through the Northwest Territories to the northern end of the TransCanada system from the Mackenzie Delta.
In the case of the oilsands gas line no objections were raised in extensive consultation with landowners, aboriginal communities and other "interested stakeholders" in the sparsely populated forests and muskeg swamps the pipe will cross, TransCanada said.
Initial deliveries of 1.3-1.5 Bcf/d will exceed the planned opening capacity of the $16.2 billion Mackenzie Gas Project now proposed for construction by 2013 at the earliest.
But gas use in thermal bitumen production and upgrading, plus oilsands plant power stations, will jump to 1.8 Bcf/d by 2015 from a current 650 MMcf/d, the NEB said in a forecast released earlier this month.
The same forecast predicted that oilsands production will nearly triple to 2.8 million b/d by 2008. Improved technology in new bitumen projects is reducing gas consumption. But the oilsands growth includes major expansions by operations built in the 1960s and '70s when gas was cheap and exports were tightly restricted. The overall gain in efficiency will be a modest reduction in the average oilsands "gas intensity" to 0.59 Mcf per barrel of production in 2015 from 0.67 Mcf currently.
A new pipeline for express gas deliveries to the oilsands has been on Canadian industry drawing boards since the late 1990s and has repeatedly ignited protests by environmental organizations.
Conservationists lined up to resist the Mackenzie project when its roving environmental review panel held Edmonton hearings earlier this year. Protesters said the Arctic would be spoiled only to nurture the most polluting arm of Alberta industry. But Mackenzie project senior partner Imperial Oil, also a top bitumen producer, said the oilsands rush would continue even if the Arctic gas project froze.
The two major branches of the fossil fuels industry are developing independently, the firm told the Edmonton hearings shortly before announcing a three-year delay of the Arctic pipeline due to climbing costs and slow regulatory procedures.
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