Alberta Starts Work on New Natural Gas Pipeline

Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

Summary

A natural gas pipeline in Alberta will help feed the industrial heartland, provincial officials said. Energy has become a central component of a broader Canadian initiative meant to offset U.S. economic pressure.

Alberta Expecting an Economic Lift from the Network

Officials in Alberta this week held a groundbreaking ceremony for the Yellowhead natural gas pipeline.

Yellowhead will be a 143-mile pipeline running from Peers, Alberta to the provincial industrial heartland in Fort Saskatchewan. It has a design capacity of 1.1 billion cubic feet per day (Bcf/d) of natural gas and follows approval of the project in July by the Alberta Utilities Commission. It could be in service by late next year. The Industrial Info Resources Global Market Intelligence (GMI) Pipelines Project Database offers a detailed reports on the project.

According to Industrial Info Resources data, there are 116 active capital oil & gas pipelines, production and terminals projects in Western Canada with a total investment value of nearly US$23 billion.

Apart from ensuring a reliable source of natural gas to industries in Alberta, the provincial government said it expects the downstream investments incentivized by the project to add US$2.7 billion to Alberta's gross domestic product (GDP).

The provincial government estimated that higher commodity prices are driving up work in oil and gas development. Through August, the last full month for which the provincial government has data, upstream activity was up 11% year-on-year.

"By strengthening our natural gas infrastructure, we are creating the conditions for greater industrial development, increased economic activity and a more competitive economy," Alberta Premier Danielle Smith said in a statement.

Alberta expects to see its marketable natural gas production expand by 13.5 Bdf/d over the next decade. Apart from Yellowhead, Industrial Info continues to follow the status of the midstream portfolio in Alberta.

Among the larger projects by investment value is the US$3.1 billion Peace River-Prince Rupert grassroot natural gas pipeline, which could be completed by late 2027.

Energy Part of Canadian Trade Diversification Efforts

The overall Canadian energy sector is included in a trade-diversification strategy steered by Prime Minister Mark Carney, a former central bank governor working to expand trade outside of North America to counter the bellicose economic rhetoric from U.S. President Donald Trump.

Already delivering natural gas outside North America from British Columbia, Carney's administration is hoping for more opportunities to expand exports from a newly-announced crude oil pipeline from Alberta dubbed Pacific Link.

Largely following the path of the existing Trans Mountain pipeline, the new artery has a total investment value of US$950 million and would have a peak throughput capacity of 1 million barrels per day (bpd).

The federal government expects Pacific Link will generate more than US$14 billion in GDP and US$70 billion in government revenue by 2060. Ports along the Pacific Coast in Canada already deliver nearly US$280 billion worth of goods annually.

The federal Canadian government expects total crude oil production nationally to average 5.6 million bpd, which would mark a 40% increase from 2016 levels should levels hold through the rest of the year. For just Alberta, the 10-year rate of expansion was closer to 45%, with production expected to average 4.6 million bpd this year, federal data show.

By the Numbers

• 1.1 Billion: Cubic feet per day of natural gas from new Yellowhead pipeline
• 11%: Year-over-year increase in upstream activity in Alberta

Key Takeaways

• Alberta expects billions in GDP from energy investments.
• Apart from oil, the province is expecting growth in its natural gas sector.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).