While it will take another two years for a Mackenzie Valley production and pipeline project to come together, there are signs that a safety margin is developing in Canadian natural gas supplies. Western Canada’s established, heavily exploited gas fields can still deliver production growth for years to come, the National Energy Board has been told.
TransCanada PipeLines Ltd. delivered the reassuring word in an application for a year-2002 expansion program dedicated primarily to increasing exports to California and the northwestern United States. TransCanada predicted that production from the western provinces can rise by about 15% to a sustained rate of 20 Bcf/d until at least 2010.
Titled the Westpath Expansion, TransCanada’s proposal calls for $48.3 million in new facilities to raise capacity on its British Columbia System by 420 MMcf/d or 16% to about 3 Bcf/d. The route crosses southeastern B.C. from the Alberta boundary to an export point on the U.S. border, where it fills PG&E Gas Transmission.
Along with U.S. traders and power generators, customers lined up for the added service include Vancouver distributor BC Gas Utility Ltd. and Powerex Corp., a subsidiary of BC Hydro that procures fuel for gas-fired power stations.
TransCanada told the NEB that it also expects to file a further expansion proposal in second-quarter 2002 for the B.C. System. The agenda matches growth under way on PG&E. TransCanada acknowledges that its forecast of supplies from the western provinces is more optimistic than the current expectations of the NEB, the Alberta Energy and Utilities Board and the Canadian Gas Potential Committee. The pipeline company said its information goes beyond official public records to include confidential data from customers, its own proprietary studies and updated information on results of last year’s boom in gas drilling.
The pipeline has told the NEB that “with continued demand growth, the Western Canada Sedimentary Basin should be able to support increasing levels of gas deliveries of up to 20 Bcf/d at least through this decade.” Production from Alberta, B.C. and Saskatchewan averaged an estimated 17.2 Bcf/d in 2001. TransCanada also predicts that “unconventional gas” — chiefly coalbed methane, and possibly reserves in “tight” or difficult geological formations — will enter production by about 2006 and eventually reach 4 Bcf/d. But the pipeline projection acknowledges most tight gas “is not currently considered economically available within the forecast horizon (to the year 2025) and current technological assumptions.” At the same time, TransCanada said there is also great uncertainty in predicting gas production from coal deposits because there is none yet in Canada.
In the absence of a performance record to guide reserves and production projections, the pipeline says only that “if research and development and economics lead to successful commercial operations, these sources may start contributing supply this decade.”
In a separate toll case before the NEB, TransCanada predicts it will be 2008 before northern gas — from either the Northwest Territories or Alaska — begins to flow south. An announcement Jan. 14 by the Mackenzie Delta Producers Group and the Mackenzie Valley Aboriginal Pipeline Corp. suggested that TransCanada’s educated guesswork is on the money. After nearly two years of preliminary feasibility studies and consultations with northern communities, the group — Imperial Oil, Conoco Canada, Shell Canada and ExxonMobil Canada — declared intentions to go ahead on a second planning stage. Next comes the “project definition phase,” or $200-$250 million in technical, environmental, commercial and consultation work required to make regulatory applications for field, gas-gathering and pipeline facilities.
Conoco predicted the package will be completed and placed before Canadian authorities in 2003. The group says it intends to tap Arctic discoveries called Taglu, Parsons Lake and Niglintgak to send 1.2-1.5 Bcf/d south to northwestern Alberta. The plan calls for the gas to finish its trip to markets via spare capacity on TransCanada’s system.
TransCanada is in step with the group’s expectations in suggesting it will take five years beyond 2003 to collect approvals and build the project. The pipeline company’s forecast suggests northern production will arrive gradually, going from a starting rate at 500 MMcf/d in 2008 to 900 MMcf/d in ’09, 1.1 Bcf/d in 2010, 1.2 Bcf/d in 2011 and 1.4 Bcf/d by 2012. The new forecast still does not predict which northern gas will flow, however.
As a partner in the reborn Alaskan Northwest Natural Gas Transportation Co., TransCanada is teamed up with eight other companies to revive the Alaska Highway pipeline route worked out in the 1970s for production from Prudhoe Bay. In the documents before the NEB, TransCanada says it “recognizes various uncertainties with respect to northern gas supply regarding economics, timing, routing and scope. It’s unclear as to which pipeline will be successful in attracting northern gas.”
Â©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |