Bc gas uncorked by neb decision on north montney mainline pipe 2018-05-24 natural gas intelligence electricity projects for grade 7

Rising British Columbia (BC) unconventional production will be redirected east and south across Canada and the United States under a pipeline approval granted Wednesday to TransCanada Corp. in the wake of a scrapped Pacific Coast liquefied natural gas (LNG) export terminal project.

NGTL estimates that the area holds 85 Tcf of recoverable gas and predicts production will grow five-fold into the range of 3.5 Bcf/d by the 2030s. The resource wealth is also driving BC gas processing and liquid byproducts delivery and export projects by other companies.

The NEB rejected opposition to the NMML by the Alberta government and gas producers that did not book any of its capacity. The critics said the project would worsen congestion of pipelines and markets for Western Canadian gas, further driving down already depressed prices for bottled up surpluses.

The NEB predicted that “as integrated North American markets continue to evolve, gas demand will continue to seek out low cost sources of gas supply. This could result in expansions on the NGTL System to accommodate North Montney production growth, as well as increases to export capacity.”

The NMML schedule sought swift completion in 2019. Lengthy hearings on the project delayed the planned early 2018 start on construction. However, TransCanada on Thursday predicted the 2019 in-service target can still be hit if work begins before the end of the year.

TransCanada President Russ Girling described the NMML as a “critical piece of energy infrastructure to natural gas producers and downstream markets throughout Canada and the United States…These facilities are critical to the timely and economic development of the tremendous natural gas resource in the North Montney play."

The decision complicated the project outlook by granting a partial victory to the project’s critics, as well as BC pipeline rival Westcoast Energy. The NEB ordered TransCanada to devise new, potentially more expensive tolls than the original low-cost financial blueprint for the NMML.

The board agreed with the critics that TransCanada plans to charge standard, low “rolled-in” or “postage-stamp” tolls for the NMML could cause “excessive cross-subsidization” by shippers that only use other parts of the NGTL grid. The TransCanada regime, born in Alberta, is also potentially unfair competition in BC against Westcoast, the board added.

“Unlike, for example, the addition of looping or a compressor station along existing pipeline right-of-way, which would be physically used by both new and existing system shippers, the North Montney Mainline is in a distinct right-of-way beyond the terminus of the existing NGTL system, and will only be physically utilized by an identifiable set of shippers,” the NEB said.

The ruling allows use of rolled-in tolls for the first year of NMML operation. After that “provisional period” TransCanada is required to propose a new regime or raise rates by defaulting to a “stand-alone” or “stacked” charge covering 100% of the new line’s cost without spreading it across all traffic on the NGTL grid.

Another 785 MMcf/d of NMML service has been sold to Kelt Exploration; Aitken Creek Gas; Painted Pony Petroleum Ltd; Arc Resources; Saguaro Resources; Black Swan Energy; Tourmaline Oil; Canbriam Energy; ConocoPhillips Canada, and UGR Blair Creek.