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Canadian gas line project on the move; shippers asked to indicate volumes
Gary Park Petroleum News Calgary correspondent
Imperial Oil is stepping up the pace of the proposed Mackenzie Valley natural gas pipeline by giving potential shippers until mid-December to indicate how much gas they expect to move on the system.
The lead partner in the Mackenzie Delta Producers Group, Imperial told the E&P companies active in Canada’s Arctic the week of Sept. 15 that they will be asked to sign “precedent agreements” to help determine the initial capacity of the C$4 billion pipeline.
Hart Searle, a spokesman for Imperial, told Petroleum News that the agreements are a “major aspect” of the applications that are expected to be filed with Canada’s National Energy Board in 2004, with the goal of starting shipments in 2009.
He said “final firm service” agreements will not be required until regulatory approvals have been obtained.
Based on a non-binding open season last summer, which attracted 20 responses, partners in the producers’ consortium established a “base case” of 1.2 billion cubic feet per day with the potential for 1.9 bcf per day.
The consortium of Imperial, ConocoPhillips Canada, Shell Canada and ExxonMobil Canada has indicated its requirements will be 800 million to 1 bcf per day from the three anchor fields which have reserves of 5.8 trillion cubic feet. Explorers to make up difference That shifts attention to the Mackenzie Delta Explorers Group — consisting largely of Canadian and U.S. controlled independents — to make up the difference.
So far those companies have reported only two discoveries in the last two winters — one by a partnership of Devon Canada and Petro-Canada and one by Chevron Canada Resources, BP Canada Energy and Burlington Resources Canada.
The Devon/Petro-Canada partnership has tested its Tuk M-18 discovery at 30 million cubic feet per day, while the Chevron et al Langley K-30 well tested in spring at a restricted flow rate of 18 million cubic feet per day. Otherwise, drilling results from the last two winters have fallen short of hopes, with three dry holes reported and one well suspended. But the Imperial spokesman said “we know a lot of (drilling) activity is under way or planned.” With that in mind the project proponents are “trying to maintain flexibility as long as practical.”
To ease one of the concerns of the explorers’ group, the Imperial spokesman gave an assurance that all shippers using the Mackenzie Valley pipeline will pay the same toll rates, whether they are members of the lead consortium or not.
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