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    Canada’s TC Energy sees NorAm gas demand strength

Summary

Gas pipelines account for large part of capital programme [Image: Coastal GasLink]

by: Dale Lunan

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Canada’s TC Energy sees NorAm gas demand strength

Canadian energy infrastructure giant TC Energy expects natural gas to play a “pivotal” role in North America’s energy future, executives at its virtual investor day said December 1.

All forms of energy, CEO Francois Poirier said, will be needed as energy systems around the world transition to a lower-carbon future, which supports the company’s vision to be the premier energy infrastructure company on the continent.

But natural gas will be the pre-eminent source of new demand between now and 2030, he added, which explains the decidedly gas-centric focus of its current C$29bn (US$22.7bn) capital programme: C$23.4bn will go to natural gas pipeline projects in Canada, the US and Mexico, with another C$4.3bn dedicated to power and storage projects. Liquids pipeline projects account for only C$200mn of the total programme.

“And we’re well-positioned to deliver decarbonisation solutions beyond our existing capital programme, including the broad development of carbon capture, utilisation and storage (CCUS) and hydrogen, in conjunction with renewables,” Poirier said.

Over the next 10 years, TC Energy expects North American natural gas demand to increase by 25%, with growth coming from all sectors but driven “most dramatically” by coal-to-gas conversion efforts and rising global demand for LNG, said Tracy Robinson, TC Energy’s executive vice president and president of both its Canadian natural gas pipelines division and Coastal GasLink, the C$6.6bn pipeline that will deliver Montney gas to the Shell-led LNG Canada liquefaction terminal on Canada’s west coast.

TC Energy’s existing natural gas pipeline assets sit atop two of the most prolific and lowest-cost gas supply basins in North America, the Western Canada Sedimentary Basin (WCSB), covering much of the Canadian provinces of Alberta and Saskatchewan and the northeastern corner of British Columbia, and the Appalachia basin in the US, which sprawls across nine states from Georgia to New York.

TC Energy’s 93,000 km of gas pipelines and 653 bn ft3 of storage capacity already gives it a “dominant incumbent position” in the North American natural gas market, Robinson said, delivering 25% of continental natural gas demand to key markets in Canada, the US Midwest and Northeast and the Gulf Coast.

North American gas demand, she said, is expected to increase to 130bn ft3/day by 2030 from 103bn ft3/day in 2020, and much of that demand will be met by supply growth in the WCSB and Appalachia.

“We are all about connecting competitive natural gas to key markets,” Robinson said. “Supply from the WCSB and the Appalachia basin is set to grow by about 13bn ft3/day over the next 10 years.”

But, she added, it’s not just the fact that WCSB or Appalachia gas is low-cost that makes it attractive on global markets.

“It’s also produced in a way that minimises environmental impacts,” she said. “If you consider the global pledges to reduce methane, like those agreed to even last month at COP26, these give countries with strong environmental performance records, like the US and Canada, an advantage over those with less stringent regulations.”