Ladyfern pipeline approved by federal regulator

Gary Park

Canada Natural Resources Ltd. is set to quicken the pace of opening up British Columbia’s Ladyfern natural gas field, now that it has National Energy Board approval to build a feeder line.

The C$8.6 million project , covering about 7 miles, is expected to start deliveries of 680 million cubic feet per day by mid-March 2002, both to meet Canada Natural Resources needs and anticipated third-party volumes for the foreseeable future.

The National Energy Board said in its Dec. 19 ruling a production-sharing agreement by Canada Natural Resources, Alberta Energy Co. Ltd. and Murphy Oil Co. Ltd. and the long-term prospects for North American gas consumption have satisfied the board that Canada Natural Resources can finance the project and that the pipeline will operate at a reasonable level for its economic life.

Murphy president Harvey Doerr said that his company has taken an equity position and, although the line might be oversized for the “long run” it will serve an area much larger than Ladyfern.

Ladyfern production is currently around 450 million cubic feet per day, but Canada Natural Resources startled some industry observes in its pipeline application by projecting eventual output of 1.35 billion cubic feet per day. Canada Natural Resources alone estimates it will have more than 300 million cubic feet per day of production by March 2002.

In its latest quarterly report, Canada Natural Resources said it has two wells in production at Ladyfern — which has been rated as the largest single gas discovery in Canada since the late 1980s — although pipeline capacity has restricted output to 55 million cubic feet per day for each well. Drilling, completion and testing of three more wells has just been wrapped up.