Canadian Regulator Approves Alberta Gas Pipe Project

Canada’s National Energy Board (NEB), in a decision handed down April 11, has approved an application from Nova Gas Transmission Limited (NGTL) for its West Path Delivery Project, designed to increase the ability of western Canadian producers to access domestic markets in southern Alberta and export markets in the US Pacific Northwest and California.

The project consists of 21.5 miles (34.4 km) of 42-inch pipeline loop west of the city of Calgary and two new compressor stations and would increase firm capacity on NGTL’s Western Alberta System (Was) Mainline by about 288mn ft³/day. Capital cost is estimated at C$409mn (US$307mn) and the new facilities should be in service by June 2020.

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In its application to the NEB, NGTL said the project was driven largely by producers in the Western Canadian Sedimentary Basin (WCSB) seeking increased access to export markets. An open season in May 2017 resulted in new firm transportation contracts for 288mn ft³/day over terms averaging 17.5 years, but existing capacity on the Was Mainline is insufficient to meet new and existing contract demand.

“NGTL submitted that resource development and growth of the basin, and in turn the associated economic benefits, depend on the ability to increase egress to key markets,” the NEB said in its letter decision. “The contracts associated with the project are a commitment to expand egress and to transport gas from the WCSB to key downstream western (US) markets.”

WCSB supply available to the NGTL system is expected to reach 16.1bn ft³/day in 2030 from 11.3bn ft³/day in 2016, NGTL said in its application, and West Path Delivery is expected to provide transportation access to growing shale gas supplies in BC and Alberta, as well as from additional tight conventional supply sources in Alberta’s Deep Basin.

“While WCSB was once supply constrained, the key issue now facing WCSB producers is the need to access markets for the significant resource potential of the basin,” the board said in its decision. Approval of the West Path Delivery project, it said, will help address that need.