Deliveries are scheduled to start in May from Canada’s newestgas production frontier in the Northwest Territories after a groupled by Chevron Canada Resources Ltd. achieved a breakthrough inlining up approvals from a host of federal, territorial, native andenvironmental agencies.

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

While construction is arduous in the mountainous, heavilywooded, all but roadless and almost entirely aboriginal regionwhere temperatures of minus-30øC (-22 Fahrenheit) are consideredmild at this time of year, doing the work in winter was a key partof winning approval for the project. It makes clean, virtuallyzero-damage water crossings possible because most streams arefrozen solid along with the ground so that going through them islike working in rock.

Officials at Chevron Canada say the northern wells put it backin the exploration business after about a two-year absence, becausethey rate these wells as having world-class “impact.” Elsewhere inNorth America, only Canada’s East Coast and deep-water drilling inthe Gulf of Mexico rank that high on Chevron’s agenda ofexploration targets. The first Liard well found an estimated400-600 Bcf of reserves. The northern activity is only the tip ofan iceberg of accelerating gas drilling as Canadian producersscramble for new production to fill expanded pipeline capacity.

The gas hunt is accelerating throughout the Canadian industryacross the western provinces. The community’s most conservativeforecaster, the Petroleum Services Association of Canada, hasissued revised projections raising its expectations for year-2000western drilling by 7% to 14,545 wells.

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

Alberta, source of four-fifths of Canadian gas production, isexpected to continue dominating field activity this year with about70% of the wells. But northeastern British Columbia, almostentirely a gas drilling area, is projected be a hot spot with arecord 1,308 wells. While Saskatchewan remains a heavy oil area,gas is expected to account for about two-thirds of its projected3,296 wells in 2000.

Gordon Jaremko, Calgary

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