The 45-mile-long Lynx natural gas pipeline, which will act as the main trunk system for the growing Grande Cache area of the Northern Alberta Foothills, has ramped up with throughput now at 40 MMcf/d, Talisman Energy said Thursday. The system will gather up to 130 MMcf/d of sour gas from the greater Grande Cache area, a growing gas play for Talisman.

The 12-inch pipe will extend from the Findley area east of Grande Cache and run northwest through the heart of the trend to the new Lynx dehydration facility. The system, in which Talisman holds a 45% stake, will deliver raw gas at Findley to several pipelines, including Talisman’s wholly owned Central Foothills Gas Gathering System, which will generate incremental transportation and processing for the producer’s midstream operations.

Talisman said the new pipe, which cost $87.5 million (C$97 million), will open up a “large geographic area, approximately 20 townships,” for gas exploration. The Calgary-based independent already has built an extensive land position along the corridor, identifying 50 prospects and leads in the vicinity.

“The Lynx pipeline opens up a very prospective natural gas exploration area for Talisman,” said CEO Jim Buckee. “Although the main purpose is to use Talisman’s midstream operations to provide strategic support for our natural gas exploration and development activities, we have developed this business into a valuable asset in its own right. We have increased total volumes (Talisman and third-party raw gas) through our facilities from 155 MMcf/d in 2002, to over 400 MMcf/d last year and expect to reach 600 MMcf/d by the end of this year.”

The Northern Alberta Foothills is a new core exploration and development area, midway between Talisman’s successful structural plays in northeastern BC and the Central Alberta Foothills, with high deliverability, multi-zone potential. Talisman is the largest mineral rights holder in the area, having an average 56% working interest in 345,600 gross acres.

Talisman also is installing additional pipeline facilities in the Palliser area, which are expected to be complete in September. The Palliser system, wholly owned by Talisman, will connect wells in the northernmost part of the Narraway trend to existing pipelines that move gas into British Columbia. The Palliser system will have an initial raw gas capacity of 45 MMcf/d and will cost about $27 million (C$30 million).

Across its North American operations, Talisman said it has about 100 MMcf/d of sales gas shut-in or awaiting completion of infrastructure. The Lynx pipeline and Palliser pipeline are expected to bring an additional 20 MMcf/d of shut-in gas to market by September. Talisman said its North American natural gas production will average about 880 MMcf/d in 2Q2006, increasing to more than 930 MMcf/d in 3Q2006 and to more than 940 MMcf/d by the end of the year, despite the loss of 20 MMcf/d in the second half of the year associated with noncore asset sales.

“This development is an example of the application of Talisman’s North American deep gas strategy,” said Buckee. “We have built a significant land position to create this core area, using our technical expertise to find and develop the gas, which we will ship through Talisman-owned infrastructure. There is significant natural gas potential in the Northern Alberta Foothills region, and Talisman is extremely well-positioned.”

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