TransCanada's Keystone pipeline facilities are seen in Hardisty, Alta., on Friday, Nov. 6, 2015. Alberta and British Columbia natural gas producers will have access to more pipeline capacity through TransCanada Corp.’s $655-million planned boost to its Nova system.Jeff McIntosh/The Canadian Press
Alberta and British Columbia natural gas producers will have access to more pipeline capacity through TransCanada Corp.'s $655-million planned boost to its Nova system.
The Calgary-based pipeline company said Wednesday that its subsidiary, Nova Gas Transmission Ltd., will move forward with an expansion to grow natural gas transportation capacity by approximately 355 million cubic feet a day.
The move is about adding incremental pipeline room in areas where production is increasing – such as the Montney, Duvernay and Deep Basin – to deliver more natural gas to industrial customers within Alberta, or to move product to markets beyond Western Canada. The project is on top of TransCanada's near-term Nova gas system expansion program worth $5.4-billion, referenced in its third-quarter results last month.
"This project will increase capacity in a critical area of the NGTL System that connects and transports growing supplies of unconventional natural gas," TransCanada executive vice-president Karl Johannson said in a news release.
The "Saddle West" expansion project will twin 29 kilometres of existing natural gas pipelines northwest of Grande Prairie, Alta., and add five compressor units at existing station sites and new metering facilities. The expansion will translate into a volumetric increase of about 3 per cent on the Nova natural gas pipeline system.
Unconventional natural gas supplies in northwestern Alberta and northeastern British Columbia are growing despite lower gas prices, uncertainty about whether Canadian liquefied natural gas projects will go ahead, and the decade-long rise of massive shale gas plays in the northeastern United States.
This growth continues because a few key natural gas resources, such as the Montney, are highly productive and often come with the added bonus of lucrative condensates – used by oil sands producers as a blending agent for bitumen.
The National Energy Board forecasts that production from the Montney will more than triple by 2040.
Gary Leach, president of the Explorers and Producers Association of Canada, said TransCanada's expansion news Wednesday was anticipated but is significant.
"The supply is shifting to those basins that can produce, and make money and are commercial, in today's lower-price environment," Mr. Leach said.
"Those big resources that we have in the Deep Basin and Montney are the ones that are going to be our work-horse gas supplies going forward."
Kelly Cryderman