TransCanada PipeLines has announced an agreement with the Government of the Northwest Territories (GNWT) to build a direct connection between the rapidly developing reserves in the southern part of the territories and the TransCanada mainline.

The two ended a series of discussions with the announcement they would work together to encourage a cost effective, competitive natural gas transmission infrastructure in the area and eventually in the Mackenzie Delta as well.

Originally, producers in the Northwest Territories had sought connections with TransCanada’s Alberta intra-provincial line, formerly known as Nova Gas Transmission. The territorial government filed an appeal in May with the National Energy Board (NEB) asking the board to take jurisdiction over Nova and force it to connect the new drilling areas with long distance lines and markets (See NGI, May 24, 1999). Wednesday’s agreement circumvents the Nova/jurisdictional wrangle, and the GNWT has said it will withdraw its appeal to the NEB.

The reserves to be brought on line include 1 Tcf proven and another 3 to 5 Tcf potential. The Canadian arm of San Francisco-based Chevron Corp. calculated it found reserves of 400-600 Bcf with a single new discovery well in the southern Northwest Territories, near Fort Liard. The company said its tests show the 10,000-feet deep well will deliver 70-100 MMcf/d when it is put on production. Another well recently brought in in the Liard area was tested at 45 MMcf/d with an estimated 250 Bcf of marketable gas. The companies expect to drill several additional development and exploration wells with production potential of 50-100 MMcf/d by next summer (See NGI, May 17 & 31, 1999).

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