SEATTLE (Oil Monster): TC Energy plans to unveil a "meaningful" expansion of its NGTL natural gas pipeline network in December as Alberta pushes for additional transportation capacity to relieve growing pressure on the province's gas market.
TC Energy CEO François Poirier said the company has been assessing commercial demand for a potentially significant expansion of the NGTL system beyond 2029.
Poirier declined to disclose the proposed capacity increase but said the figure will be announced in December.
"We have a really good sense of what the actual demand is," Poirier said. "And I'm confident that we will be able to satisfy the government of Alberta's concern."
The NGTL system is the main natural gas gathering and transportation network serving Western Canada, connecting producers with storage, domestic markets and export routes across Canada and the United States.
Reuters reported that the network currently moves an average of about 15 billion cubic feet of natural gas per day and is fully subscribed.
TC Energy said it has recently seen a dramatic increase in requests for service and has already committed to adding approximately 1 Bcf/d of capacity before 2029.
Alberta's challenge is increasingly about transportation capacity rather than resource availability. NGTL is already heavily utilized, while additional Western Canadian gas is being pulled toward LNG exports, industrial demand and power generation. The December announcement will show whether TC Energy believes the next expansion can materially close that infrastructure gap after 2029.
The Alberta government has become increasingly concerned that insufficient transportation growth could leave the province facing a multi-year natural gas supply surplus.
A source familiar with the discussions told Reuters that the province is considering measures to improve access to the natural gas network, although specific policy changes have not been disclosed.
TC Energy has said it is prepared to continue investing in NGTL but wants an investment framework that provides an appropriate balance between capital risk and returns.
Poirier said the company is negotiating with NGTL customers over a new commercial framework that would improve the risk-return profile of future investment and place returns closer to those available on TC Energy's U.S. projects.
If an agreement cannot be reached, TC Energy could ask the Canada Energy Regulator to adjudicate the matter.
TC Energy said Canadian natural gas pipeline deliveries averaged 24.3 Bcf/d during the third quarter, up 6% from a year earlier, while NGTL system receipts averaged 14.3 Bcf/d, up 2%.
The company expects North American natural gas demand to increase by approximately 51 Bcf/d between 2025 and 2035, driven largely by LNG exports and gas-fired power generation.
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The key development will come in December, when TC Energy is expected to disclose how much additional NGTL capacity it is proposing beyond 2029.
Investors and Alberta gas producers will also be watching whether TC Energy and its customers can agree on the commercial framework needed to support the investment without regulatory intervention.
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Courtesy: www.reuters.com
