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Deliveries from Northwest Territories Begin in May

Deliveries from Northwest Territories Begin in May

Deliveries are scheduled to start in May from Canada's newest gas production frontier in the Northwest Territories after a group led by Chevron Canada Resources Ltd. achieved a breakthrough in lining up approvals from a host of federal, territorial, native and environmental agencies.

Construction is under way on a C$21 million (US$14.5 million) pipeline to tie the 10-company consortium's spectacular discovery at Fort Liard into Westcoast Energy Inc.'s northern-most arms of the Canadian pipeline grid. The 23-mile stretch of 14-inch diameter pipe initially will carry 75 MMcf/d from the group's first discovery, one of the 10 biggest gas finds ever made in Canada. A second, comparable well is scheduled to be put into production by the end of the year after construction of another length of pipe about 5.6 miles long.

While construction is arduous in the mountainous, heavily wooded, all but roadless and almost entirely aboriginal region where temperatures of minus-30øC (-22 Fahrenheit) are considered mild at this time of year, doing the work in winter was a key part of winning approval for the project. It makes clean, virtually zero-damage water crossings possible because most streams are frozen solid along with the ground so that going through them is like working in rock.

Officials at Chevron Canada say the northern wells put it back in the exploration business after about a two-year absence, because they rate these wells as having world-class "impact." Elsewhere in North America, only Canada's East Coast and deep-water drilling in the Gulf of Mexico rank that high on Chevron's agenda of exploration targets. The first Liard well found an estimated 400-600 Bcf of reserves. The northern activity is only the tip of an iceberg of accelerating gas drilling as Canadian producers scramble for new production to fill expanded pipeline capacity.

The gas hunt is accelerating throughout the Canadian industry across the western provinces. The community's most conservative forecaster, the Petroleum Services Association of Canada, has issued revised projections raising its expectations for year-2000 western drilling by 7% to 14,545 wells.

Although partially a response to strong oil prices, the acceleration is primarily attributed to gas. PSAC expects gas to be the target for 70% of western Canadian drilling this year. The group also projects a record 9,051 Canadian gas well completions, 3,401 oil successes, 1,900 dry holes and 193 service wells for field uses such as waste-water disposal.

Alberta, source of four-fifths of Canadian gas production, is expected to continue dominating field activity this year with about 70% of the wells. But northeastern British Columbia, almost entirely a gas drilling area, is projected be a hot spot with a record 1,308 wells. While Saskatchewan remains a heavy oil area, gas is expected to account for about two-thirds of its projected 3,296 wells in 2000.

Gordon Jaremko, Calgary

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