TransCanada PipeLines has announced an agreement with theGovernment of the Northwest Territories (GNWT) to build a directconnection between the rapidly developing reserves in the southernpart of the territories and the TransCanada mainline.

The two ended a series of discussions with the announcement theywould work together to encourage a cost effective, competitivenatural gas transmission infrastructure in the area and eventuallyin the Mackenzie Delta as well. Originally, producers in theNorthwest Territories had sought connections with TransCanada’sAlberta intra-provincial line, Nova Gas Transmission. Theterritorial government filed an appeal in May with the NationalEnergy Board (NEB) asking the board to take jurisdiction over Novaand force it to connect the new drilling areas with long distancelines and markets. Wednesday’s agreement circumvents theNova/jurisdictional wrangle, and the GNWT has said it will withdrawits appeal to the NEB.

The reserves to be brought on line include 1 Tcf proven andanother 3 to 5 Tcf potential. A single well recently brought in inthe Liard area was tested at 45 MMcf/d with an estimated 250 Bcf ofmarketable gas. The companies expect to drill several additionaldevelopment and exploration wells with production potential of50-100 MMcf/d by next summer.

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