Northeast Out-of-Region Expansions

Updated July 2018

The figure highlights new pipeline capacity, providing an incremental 11.9 Bcf/d of out-of-region capacity on a subscribed basis from 2018 to 2020.

Due to significant increases in Appalachia supply and only modest growth in Appalachian demand, access to egress capacity exiting the region is required to monetize the gas resource.

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US Northeast Demand and Pipeline Capacity

Updated July 2018

The figure presents incremental pipeline development to 2021. Pipeline capacity shown has firm market support and Federal Energy Regulatory Commission (FERC) approvals.

  • Solomon expects excess pipeline capacity for most of the forecast period.
  • Tightness in exit pipeline capacity has been relieved as 2018–2019 projects under construction are put into service. However, without further development capacity for post-2021 supply growth, Solomon would expect tightness in exit pipeline capacity to return.
  • Cove Point LNG is now in service; potential to expand export capacity exists and could be developed later in the forecast period.
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Western Canadian Oil Export Pipelines

Updated December 2017

This figure shows Western Canada crude oil pipeline infrastructure and connectivity. Four major pipelines are directly connected to Canadian oil supply hubs at Edmonton and Hardisty, Alberta. Combined, they ship 95% of ex‑Western Canada oil (Statistics Canada, Supply & Disposition of Crude Oil & Equivalent):

  • Enbridge Mainline – dominant transporter (50%) of Alberta oil to US, with export capacity of 2,500 thousand barrels per day (M bbl/d); moves crude from Edmonton & Hardisty to Gretna, Manitoba export border point. From Gretna, oil moves to Superior, Wisconsin, splitting to Line 5 east to Sarnia, with the majority of the oil flowing south to the Chicago area via the Lakehead pipeline system.
  • TransCanada Keystone Pipeline – Alberta to Illinois. Completion of the Keystone Cushing Extension from Steele City, Nebraska to Cushing, Oklahoma in February 2011 increases total deliverable system capacity to 590M bbl/d, 24% of oil exports.
  • Kinder Morgan Trans Mountain Pipeline – Edmonton, Alberta to British Columbia and the Pacific Northwest, transports 300M bbl/d.
  • Kinder Morgan Express Pipeline – originates in Hardisty, Alberta with stated capacity of 280M bbl/d feeding into Platte system. Both Kinder Morgan systems jointly contribute 21% of US Western Canada oil imports (remaining 5% is composed of Milk River & Plains Rangeland).
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Average Pipeline Project Capital Cost, USD/in-mi

Updated December 2017

Solomon‘s cost analysis of 180 pipeline projects dates back to 2004, as shown in the figure. Average estimated cost for proposed pipeline projects in North America is double the cost in 2007 due to higher steel, labor, and other costs. Huge investments will be required in North America pipeline infrastructure, particularly in the Northeast region, where gas is growing quickly due to low full-cycle costs. The US Northeast has the highest average pipeline costs. Western Canada experienced significantly higher pipeline costs than in prior years. New pipeline systems are required to move US Shale gas supplies to the US Gulf Coast and Mexico. These are large-diameter (up to 48-inch) pipelines with overall capital costs ranging from 0.2MM USD to 3B USD, adding over 2,000 miles of new pipe to existing gas pipeline infrastructure by 2017 if all projects are completed. Mexico’s Federal Electricity Commission has announced five new pipeline projects.

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Net Change in NA Demand and Flows, 2017–2025

Updated December 2017

As illustrated on the map, the North American pipeline grid is interconnected and responsive to changes in Henry Hub pricing:

  • Growing Shale Gas within the US Northeast region will shift allocation of North American gas flows, resulting in a reduction of flows from Canada and the US Southwest.
  • Demand-side management programs and legislated renewables portfolio standards (RPS) have fixed demand. Incremental flows from Canada out-compete higher-cost Interior West flows.
  • Western Canadian supplies benefit from intra-Canadian demand (LNG, oil sands, and power) growth as almost 1.5 Bcf/d of economic capacity comes online in November 2017 when the Long-Term Fixed Price (LTFP) service comes into effect, allowing Western Canada gas to compete in the Ontario/Quebec markets. Longer-term Canadian production growth is dependent on higher-value LNG export market demand developing and on a TransCanada mainline tolling revamp post-2020.The Midwest region will require increased access to the Woodford and Fayetteville Shale Gas, located in the Southwest region, to replace diverted Interior West (Rockies) gas.
  • The US Southwest will switch from sending gas to the US Southeast to sending gas for LNG exports. Appalachia gas production will push into the Southwest to service incremental demand growth.
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2005 Canadian Gas Exports, Bcf/d

Updated December 2017

  • Based on 2005 actual.
  • The red represents supply coming from Western Canada and East Coast offshore.
  • The green represents gas supplies being exported.
  • The gold represents gas consumed in Canada demand sectors.
  • The blue represents gas imported into Canada.
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2009 Canadian Gas Exports, Bcf/d

Updated December 2017

  • Based on 2009 actual.
  • The red represents supply coming from Western Canada and East Coast offshore.
  • The green represents gas supplies being exported.
  • The gold represents gas consumed in Canada demand sectors.
  • The blue represents gas imported into Canada, including LNG.
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2012 Canadian Gas Exports, Bcf/d

Updated December 2017

  • Based on 2012 actual.
  • The red represents supply coming from Western Canada and East Coast offshore.
  • The green represents gas supplies being exported.
  • The gold represents gas consumed in Canada demand sectors.
  • The blue represents gas imported into Canada, including LNG.
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2016 Canadian Gas Exports, Bcf/d

Updated December 2017

  • Based on 2016 actual.
  • The red represents supply coming from Western Canada and East Coast offshore.
  • The green represents gas supplies being exported.
  • The gold represents gas consumed in Canada demand sectors.
  • The blue represents gas imported into Canada, including LNG.
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2020 Canadian Gas Exports, Bcf/d

Updated December 2017

  • Based on 2020 forecast.
  • The red represents supply coming from Western Canada and East Coast offshore.
  • The green represents gas supplies being exported.
  • The gold represents gas consumed in Canada demand sectors.
  • The blue represents gas imported into Canada, including LNG.
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Montney/Deep Basin Area: Map of Facilities and Pipelines

Updated December 2017

This figure shows major pipelines and facilities in the Montney/Duvernay basin area. It includes NGL/Liquids extraction facilities, sulphur recovery, acid gas flaring and injection facilities, sweet, and other facilities.

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