15th GPA Canada PJVA Annual Joint Conference Gas Transportation Developments in the WCSB

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15th GPA Canada / PJVA Annual Joint Conference
Gas Transportation Developmentsin the WCSB
Dave Murray Manager, Supply, Commercial
West Canadian Pipelines November 12, 2008
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50th Anniversary
Last Weld on the Canadian MainlineKapuskasing,
Ontario - October 10, 1958
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Natural Gas Pipelines Oil Pipelines (in
construction) Proposed Pipelines Power Plants Gas
Storage Facilities

• 59,000 km (36,500 mi) of wholly owned natural
  gas pipeline
• Interests in an additional 7,800 km (4,800 mi)
  of natural gas pipeline
• 15 Bcf/d
• 355 Bcf of natural gas storage capacity
• 19 power plants
• 10,900 megawatts
• 1.1 million bpd crude oil pipeline under
  construction

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North American Natural Gas Resources

• Major conventional natural gas basins in North
  America marked in green
• Emerging shale natural gas basins (marked in
  brown) in North America may add significant
  supply

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North American Gas Supply and Demand
Bcf/d
History
Forecast
Other
Demand
Eastern Canada
WCSB
U.S. Rockies
Gulf of Mexico
Mid-Continent
U.S. Other
Mexico
Source TransCanada
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Western Canadian Natural Gas Supply/Demand
Exports
Source TransCanada
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Alberta System JurisdictionBackground

• Current jurisdictional framework prevents the
  Alberta System from providing integrated service
  to customers that lie outside Alberta
• Jurisdictional change will eliminate this
  constraint
• Opportunities that cross provincial border
• Northeast BC Horn River, Montney, Fort Nelson,
  McMahon plus others
• Alaska

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Alberta System Jurisdiction

• Application was filed with NEB, June 17, 2008
• Additional evidence filed September 5, 2008
• Two phases
• Whether the Alberta System is now properly within
  federal jurisdiction and subject to regulation by
  the NEB
• Whether the Alberta System is required by the
  present and future public convenience and
  necessity
• NEB Process
• Two phases heard in parallel
• Oral Hearing commences November 18
• Q1, 2009 Decision

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Alberta System Jurisdiction

• Business as usual in the interim AUC oversight
• Rates and Services are not expected to change as
  a result of a change in jurisdiction
• Rates and Services discussion ongoing
• Jurisdictional change does not automatically
  result in roll-in of new facilities

It sets the stage
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ATCO Pipelines IntegrationBackground and History

• ATCO Pipelines (AP) and NGTL (Alberta System)
  have operated independently
• Customers with business that transcend AP/NGTL
  boundaries have faced stacked tolls
• For many years, a full integration of AP and NGTL
  has been contemplated and advocated by many
• NGTL 95 GRA, ATCO 94/95 GRA, NGTL 04 GRA and
  others

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ATCO Pipelines IntegrationTransaction Overview

• AP and NGTL have reached agreement on a proposed
  integration model
• Subject to regulatory approval
• The model would
• Create a single gas transmission enterprise with
  the objective of providing seamless gas
  transmission service in Alberta
• Provide a single
• Tariff
• Rate design philosophy
• System design philosophy
• Service provider
• Eliminate stacked tolls for all gas transmission
  customers
• Optimize facility and operating solutions
• Determine who builds expansion facilities
• Central Alberta Footprint (CAF)

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Benefits to Customers

• Direct access to and from NIT
• Single rate design eliminates toll stacking
• Single system design philosophy provides
  optimized facility construction and operation
• Improved efficiency of regulatory process
• Single commercial interface
• Simplified processes for customers

Greater certainty Potential Synergies Clarity
Simplicity
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NGL Inquiry

• On June 4, 2007 The EUB established the NGL
  Inquiry to examine issues with the perceived
  inequities of the current NGL rights extraction
  convention
• Issues
• Supply/demand forecast of gas and NGL
• Side-streaming and co-streaming
• Extraction Conventions on EUB regulated pipelines
• Lean gas streaming
• TransCanadas Position
• Current extraction convention should be replaced
  with a Receipt Point model - NEXT

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Alaska Pipeline Project
Mackenzie Gas Pipeline

• Alaska Pipeline
• Alaska Senate and House of Representatives voted
  in favour of granting TransCanada a license to
  build the Alaska pipeline
• Governor Sarah Palin signed the Bill that
  authorizes granting the license to TransCanada on
  August 27
• Commence open season work
• Mackenzie Gas Pipeline
• Public hearing phase of the regulatory process
  largely complete. Awaiting report of Joint
  Review Panel, likely in 2009
• Project proponents involved in discussions with
  Canadian federal government to financially
  restructure project

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Fort Nelson

• North Central Corridor
• 300 km of 42 pipe
• 26 MW of compression
• Approximately 925 million
• In-service 2010

Fort McMurrayDemand Region
Groundbirch
AB
BC
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New B.C. Unconventional Developments

• Horn River/Cordova
• 700 Tcf OGIP
• 10 - 15 wells drilled
• 10 CO2 , dry gas
• PlayersApache, EnCana, EOG, Nexen, Quicksilver,
  Devon, Crew, Imperial
• Montney/Doig
• 400 Tcf OGIP
• 70 75 Hz wells drilled
• Major PlayersEnCana, Murphy, ARC
• Shell (Duvernay), Storm Birchcliff, Cinch

Horn River Devonian MuskwaMarine Shales
Montney Triassic MontneyTight Sands/silts/shales
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B.C. Production Forecast (Preliminary)
Bcf/d
History
Forecast
?
?
1 Bcf/d from both Montney and Horn River by 2012
Source TransCanada
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Cabin
Fort Nelson
Ekwan

• Horn River Project
• Shipper requests for more than 1 Bcf/d by 2012 to
  connect Horn River area of BC to TransCanadas
  Alberta System
• Current Binding Open Season running until
  November 21, 2008
• Expected in-service Q2 2011

Groundbirch
AB
BC
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Cabin
Fort Nelson

• Groundbirch Pipeline Project
• Shipper requests for more than 1 Bcf/d by 2012 to
  connect Montney area of BC to TransCanadas
  Alberta System
• Current Binding Open Season running until
  November 21, 2008
• Expected in-service Q4 2010

Groundbirch
Gordondale
AB
BC
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Cabin
Fort Nelson

• Fort Nelson / McMahon Open Season
• During Non-binding Open Season parties expressed
  interest in service from outlet of Fort Nelson
  and McMahon plants to Alberta
• Current Binding Open Season running until
  November 21, 2008

McMahon
Groundbirch
AB
BC
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Pipelines Proposed Pipelines Gas Storage
Facilities Conventional gas basins Shale gas
basins

• Well connected to North American markets
• Supply potential shifting toward new resource
  plays within basin
• New commercial and physical solutions are being
  developed to ensure the gas transportation
  infrastructure meets the needs of the basin for
  both today and the future