TransCanada, Alliance pipelines ready for arctic gas volumes

Canadian natural gas pipelines will be ready to handle additional volumes if and when trunklines are built from Alaska and the Canadian Arctic, industry executives say. Both TransCanada PipeLines Ltd. (TCPL) and Alliance Pipeline Ltd. say they are prepared for expansion.


By an OGJ Online Correspondent

CALGARY, June 14 -- Canadian natural gas pipelines will be ready to handle additional volumes if and when trunklines are built from Alaska and the Canadian Arctic, industry executives say.

Both TransCanada PipeLines Ltd. (TCPL) and Alliance Pipeline Ltd., which now move the bulk of gas from Western Canada to continental markets, say they are prepared for expansion.

TransCanada Vice-Pres. Bob Reid said TCPL could take additional gas from both the Alaska North Slope and Canada's Mackenzie Delta. Reid noted there is spare capacity in the system, declining production in western Canada, and growing gas demand for oil sands and heavy oil projects.

Producers in both Alaska and the Mackenzie Delta are studying the feasibility of pipeline projects that could move 3.3 bcfd or more of gas to southern markets. Decisions are expected by yearend on the feasibility of the big-ticket projects.

A line with initial capacity of 800 MMcfd to 1 bcfd from the delta would cost $3 billion (Can.). The area has 5.8 tcf of reserves. A line from the North Slope, which has about 34 tcf of reserves, would cost $6.7 billion. They would connect with existing pipeline systems in Alberta and British Columbia.

Reid said TCPL likely would build a line across north-central Alberta to Fort McMurray to meet the 1 bcfd gas needs of sands and heavy oil projects.

Alliance Pipeline Vice-Pres. Dennis Prince said the pipeline, which delivers 1.3 bcfd of natural gas and liquids from western Canada to the Chicago market, could expand as required to handle Arctic gas.

"There's lots of flexibility. We could increase capacity by installing additional compressors or by adding pipe as required," Prince said.

He said adding compressors at 14 locations could increase Alliance's capacity by 500 MMcfd. Further capacity could be added by looping parts or all of the line.

Prince said there could be additional supplies of 1 bcfd from the Mackenzie Delta and Beaufort, up to 3 bcfd from Alaska, and incremental demand of 1 bcfd in Alberta.

"At the end of the day, producers will call the shots on pipelines and how the gas is monetized," Prince said.

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