Transcript Mackenzie Valley Pipeline Initiative Strategic Review

A View to The North
Canadian International Petroleum Conference
June 12, 2001
Topics I’ll Cover
• Overview of TransCanada
• Why Northern gas is needed
• Options
- routes
- downstream possibilities
• Current status
2
TransCanada’s Pipeline System
(incl. partially owned)
TransCanada PipeLines
Foothills Pipe Lines
Northern Border Pipelines
Great Lakes Gas Transmission
Trans Quebec & Maritimes Pipelines
Iroquois Gas Transmission System
Portland Transmission System
Tuscarora Pipelines
TransCanada’s power plants
3
TransCanada
• TransCanada has the second largest gas
transmission system in the world - over
38,000 km
• We move 75% of Western Canada’s natural
gas production to market
• We manage or control over 1900 MW of
power
4
Historical gas projects
in the North
Prudhoe Bay
Melville
MacKenzie Delta
Historical Proposals (Oldest First )
POLAR GAS
POLAR DELTA
CAGPL
DIRECT TO MARKET
FOOTHILLS MAPLE LEAF
ALASKA HIGHWAY
DEMPSTER
EL PASO ALASKA
TRANS-ALASKA GAS
Inuvik
YUKON
Valdez
Whitehorse
NUNAVUT
NORTHWEST
TERRITORIES
Yellowknife
Fort Nelson
Pine Point
BRITISH
COLUMBIA
ALBERTA
SASKATCHEWAN
MANITOBA
Edmonton
Vancouver
Calgary
ONTARIO
Empress
Winnipeg
Regina
Longlac
QUEBEC
Montreal
Niagara
Chicago
5
North American Demand
• Growth = 19 Bcf/d
• 50% related to
power generation
Annual
Daily
(Tcf)
(Bcf/d)
89.2
79.3
69.6
25.4
28.9
32.6
2000
2005
2010
2000
2005
2010
6
North American Gas
Demand Growth
1.8 Bcf/d
3.4%/yr
0.9 Bcf/d
2.3%/yr
2.7 Bcf/d
2.8%/yr
2.5 Bcf/d
2.8%/yr
3.1 Bcf/d
2.3%/yr
8.6 Bcf/d
2.3%/yr
Total North American demand: 70 Bcf/d in 2000
89 Bcf/d in 2010
7
North American Market Growth
Forecast
100
90
80
70
60
50
40
30
20
10
0
5.2
69.6
79.3
Daily Demand (2005
Bcf /d)
2000
84.0
Arctic Gas
2010
Arctic Frontier Gas represents
about 1/4 of the incremental supply required
8
Western Canadian Supply
Response
Gas Supply (Bcf/d)
# of Wells Drilled
10000
9200
Development
Exploration
Supply
8000
16
14
6430
6000
18
12
5330
10
8
4000
6
4
2000
2
0
0
89/90
91/92
93/94
95/96
97/98
99/00
9
What that means for the North
• Frontier gas is essential to meet demand
- It will help meet significant demand growth
• Supply/demand supports two pipelines
10
Northern Gas Resources
Mackenzie Delta
Reserves:
9 Tcf Proven
64 Tcf Ultimate
Production:
None
Alaska
Alaska North Slope
(Prudhoe Bay)
Reserves:
31 Tcf Proven
99 Tcf Ultimate
Production:
8 Bcf/d (associated)
7 Bcf/d (re-injected)
Nunavut
Yukon
Northwest Territories
Alberta
B.C.
11
Two Pipeline Option
Prudhoe Bay
Alaska
Two stand-alone pipelines
provide least
technological,
environmental and
operational risk
Arctic
National
Wildlife
Reserve
Ivvavik
National
Park
Mackenzie
Delta
Inuvik
Nunavut
Yukon Flats
Wildlife Reserve
Northwest
Territories
Yukon
Manitoba
Alberta
British
Columbia
Saskatchewan
NORTH
DAKOTA
MONTANA
WASHINGTON
IDAHO
12
Mackenzie Valley Pipeline
Lowest Cost, Quickest to Market for Delta Gas
Alaska
Route Description
•
1220 km, 30” diameter
•
Operating pressure 2050 psi
•
Initial volumes 0.8 Bcf/d
•
Ultimate volumes 1.2 Bcf/d
•
Initial cost US $2.0 billion
•
2 year Construction
Arctic
National
Wildlife
Reserve
Ivvavik
National
Park
Mackenzie
Delta
Inuvik
Yukon Flats
Wildlife Reserve
Nunavut
Northwest
Territories
Yukon
Manitoba
Alberta
British
Columbia
Saskatchewan
NORTH
DAKOTA
MONTANA
WASHINGTON
IDAHO
13
Alaska Highway Gas Pipeline Project
Lowest Cost, Quickest to Market for ANS Gas
Prudhoe Bay
Alaska
Route Description
•
2820 km, 42” diameter
•
Operating pressure 2050 psi
•
Initial volumes 2.5 Bcf/d
•
Ultimate volumes 4.0 Bcf/d
•
Initial cost US$7.6 billion
•
2 Year construction
Arctic
National
Wildlife
Reserve
Ivvavik
National
Park
Mackenzie
Delta
Nunavut
Yukon Flats
Wildlife Reserve
Northwest
Territories
Yukon
Manitoba
Alberta
British
Columbia
Saskatchewan
Gordondale
NORTH
DAKOTA
MONTANA
WASHINGTON
IDAHO
14
Accessing Growth Markets
P oten tial
A laska S up ply
Current facilities, with some
additions, can move both
Alaska and Mackenzie
Valley gas to growth
markets
P oten tial
M acK enzie D elta
S upp ly
A lb erta /
B .C .
P acific
N orth w est /
C alifo rnia
E astern C anad a /
N o rtheast U .S .A .
M idw estern U .S .A .
15
Status
• Producers in both Mackenzie Delta and Prudhoe Bay studying routing
options and determining timing
• Partnerships being formed
- APG and Producers negotiating deal in Mackenzie Valley
16
Regulatory Status
• Mackenzie Valley
- No approvals received
- Looking to consolidate regulatory process where
possible
• Alaska
- Alaska Highway Natural Gas Transportation
System has framework in place -- Northern
Pipelines Act and the Alaska Highway Natural
Gas Transportation Act
- Certificates are in place and have been used -they require current environmental protection
standards
17
Outstanding Issues
• Producers timetables and development
objectives
• Northern communities expectations
• Actual North American market demand
• Long-term natural gas price
18
TransCanada’s Expertise
• Existing facilities can get Northern gas
to growth markets.
• Extensive experience in extreme cold
weather - both in pipeline
construction and in operation of
natural gas pipelines
19
Technology and Experience
• Experience and
technology to bring in
projects on time and on
budget
• From 1994 to 1999, we
added over 3,900 km of
large pipe to our
system, almost
equivalent to the two
Northern projects
combined
20
Summary
• Frontier gas is required to meet forecast
demand
• Our efforts are focussed on complementing
those of the producers
• TransCanada expertise can add value to any
northern options
21
Ending Slide - TransCanada
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