a view to the north canadian international petroleum conference june 12, 2001 a view to the north...

A View to The North

Canadian International Petroleum ConferenceJune 12, 2001

A View to The North

Canadian International Petroleum ConferenceJune 12, 2001

2

Topics I’ll Cover

• Overview of TransCanada

• Why Northern gas is needed

• Options

- routes

- downstream possibilities

• Current status

3

BRITISHCOLUMBIA

ALBERTA

SASKATCHEWAN

MANITOBA

ONTARIO

QUEBEC

NUNAVUT

YUKON NORTHWESTTERRITORIES

Chicago

Winnipeg

Regina

Calgary

Niagara

Montreal

Longlac

Empress

Edmonton

Vancouver

Yellowknife

Fort Nelson

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

4

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

5

BRITISHCOLUMBIA

ALBERTA SASKATCHEWAN

MANITOBA

ONTARIO

QUEBEC

NUNAVUT

YUKON

NORTHWESTTERRITORIES

Chicago

WinnipegRegina

Calgary

MelvilleMacKenzie Delta

Niagara

Montreal

Longlac

Empress

Edmonton

Vancouver

Prudhoe Bay

Yellowknife

Pine Point

Inuvik

Fort Nelson

ValdezWhitehorse

Historical gas projects in the North

DIRECT TO MARKET

POLAR DELTA

CAGPL

FOOTHILLS MAPLE LEAF

ALASKA HIGHWAY

EL PASO ALASKA

TRANS-ALASKA GAS

DEMPSTER

POLAR GAS

Historical Proposals (Oldest First )

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North American Demand

25.4 28.9 32.6

2000 2005 2010

69.679.3

89.2

2000 2005 2010

Annual(Tcf)

Daily(Bcf/d)

• Growth = 19 Bcf/d• 50% related to power generation

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2.5 Bcf/d2.5 Bcf/d2.8%/yr2.8%/yr

0.9 Bcf/d0.9 Bcf/d2.3%/yr2.3%/yr

2.7 Bcf/d2.7 Bcf/d2.8%/yr2.8%/yr

1.8 Bcf/d1.8 Bcf/d3.4%/yr3.4%/yr

Total North American demand: 70 Bcf/d in 2000

89 Bcf/d in 2010

Total North American demand: 70 Bcf/d in 2000

89 Bcf/d in 2010

3.1 Bcf/d3.1 Bcf/d2.3%/yr2.3%/yr

North American GasDemand Growth

8.6 Bcf/d8.6 Bcf/d2.3%/yr2.3%/yr

8

North American Market Growth Forecast

69.679.3 84.0

5.2

0102030405060708090

100

2000 2005 2010Daily Demand ( Bcf /d) Arctic Gas

Arctic Frontier Gas represents about 1/4 of the incremental supply required

Arctic Frontier Gas represents about 1/4 of the incremental supply required

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Western Canadian Supply Response

0

2000

4000

6000

8000

10000

89/90 91/92 93/94 95/96 97/98 99/00

0

2

4

6

8

10

12

14

16

18

DevelopmentExplorationSupply

# of Wells Drilled Gas Supply (Bcf/d)

9200

6430

5330

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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

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Yukon

Alaska

Nunavut

Northwest Territories

B.C.

Alberta

Mackenzie DeltaReserves: 9 Tcf Proven 64 Tcf UltimateProduction: None

Mackenzie DeltaReserves: 9 Tcf Proven 64 Tcf UltimateProduction: None

Alaska North Slope(Prudhoe Bay)Reserves: 31 Tcf Proven 99 Tcf UltimateProduction: 8 Bcf/d (associated) 7 Bcf/d (re-injected)

Alaska North Slope(Prudhoe Bay)Reserves: 31 Tcf Proven 99 Tcf UltimateProduction: 8 Bcf/d (associated) 7 Bcf/d (re-injected)

Northern Gas Resources

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Two Pipeline Option

ArcticNationalWildlifeReserve

Yukon FlatsWildlife Reserve

IvvavikNational

ParkPrudhoe Bay

MackenzieDelta

Alaska

Yukon

NorthwestTerritories

Nunavut

Manitoba

Saskatchewan

Alberta

BritishColumbia

WASHINGTON IDAHO

MONTANA

Inuvik

NORTHDAKOTA

Two stand-alone pipelines provide least technological, environmental and operational risk

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Mackenzie Valley PipelineLowest Cost, Quickest to Market for Delta Gas

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

ArcticNationalWildlifeReserve

Yukon FlatsWildlife Reserve

IvvavikNational

Park MackenzieDelta

Alaska

Yukon

NorthwestTerritories

Nunavut

Manitoba

Saskatchewan

Alberta

BritishColumbia

WASHINGTON IDAHO

MONTANA

Inuvik

NORTHDAKOTA

14

Alaska Highway Gas Pipeline ProjectLowest Cost, Quickest to Market for ANS Gas

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

ArcticNationalWildlifeReserve

Yukon FlatsWildlife Reserve

IvvavikNational

ParkPrudhoe Bay

MackenzieDelta

Alaska

Yukon

NorthwestTerritories

Nunavut

Manitoba

Saskatchewan

Alberta

BritishColumbia

WASHINGTON IDAHO

MONTANA

Gordondale

NORTHDAKOTA

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Accessing Growth Markets

Alberta /B.C.

PacificNorthwest /California

Midwestern U.S.A.

Eastern Canada /Northeast U.S.A.

PotentialAlaska Supply

PotentialMacKenzie Delta

Supply

Current facilities, with some additions, can move both Alaska and Mackenzie Valley gas to growth markets

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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

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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

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Outstanding Issues

• Producers timetables and development objectives

• Northern communities expectations

• Actual North American market demand

• Long-term natural gas price

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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

20

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

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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

Ending Slide - TransCanada Logo