Regina – Collecting associated natural gas is one thing, but once collected, it has to find its way to the burner tip. Crown corporation TransGas provide the backbone for natural gas infrastructure in this province.
Dennis Terry, senior vice-president, TransGas and Bayhurst Gas Business Services, responded by email to our questions about TransGas’ role in addressing S-10.
Pipeline News:Can you explain TransGas’ role in the collection and movement of natural gas?
Dennis Terry:TransGas Limited (TransGas) is a wholly owned subsidiary of SaskEnergy Incorporated – its primary role is the high pressure transmission of natural gas for delivery within Saskatchewan. TransGas owns and operates a transmission system that includes over 15,000 kilometres of high-pressure pipeline, 30 compressor station sites, and 25 natural gas storage caverns across the province. This infrastructure is used to store, compress, and transport natural gas supply from Saskatchewan and Alberta to large industrial customers and the more than 550 communities served by SaskEnergy.
TransGas provides transportation service for natural gas that has been gathered, collected and processed by producers and midstream operators (all natural gas transported by TransGas must meet the quality specifications for consumption by the residential and industrial customers in Saskatchewan).
TransGas also acts as an aggregator for Alberta natural gas supply, holding the overall transportation contract with the Alberta transmission company Nova Gas Transmission Limitesd (NGTL) on behalf of all TransGas customers who contract for supply through an Alberta Receipt Service.
P.N.: Does TransGas have a monopoly on natural gas midstream services in Saskatchewan and, if so, why?
Terry:No, TransGas does not have a monopoly on natural gas midstream services in the province. SaskEnergy/TransGas is actively working with private industry midstream organizations to foster development of natural gas midstream services in order to increase Saskatchewan gas production through the capture of associated gas. This in turn will help decrease the need for natural gas imports from Alberta to meet Saskatchewan’s growing energy demands, assist in the development of the natural gas market in Saskatchewan, and strengthen industry growth and economic activity.
P.N.: How significant is the implementation of S-10 and its goal of conserving natural gas?
Terry:SaskEnergy and TransGas focus on environmental sustainability throughout their operations, and have made significant progress in working to achieve the corporation’s overall GHG emission reduction targets as part of the Government’s province-wide GHG reduction strategy. SaskEnergy/TransGas, through the Government of Saskatchewan, are committed to working jointly with the oil and gas industry to develop a plan to reduce emissions from oil and gas production activities such as flaring and venting of natural gas, the S-10 directive is an important part of this plan.
SaskEnergy/TransGas are supportive of the S-10 regulations, and the commitment to the conservation of associated natural gas within Saskatchewan. Currently the corporation is working in collaboration with the Saskatchewan Ministry of the Economy to engage oil and gas producers, midstream companies and private interest groups in identifying opportunities for alternative uses of natural gas that is currently being flared or vented.
P.N.: How much natural gas is expected to be collected in Saskatchewan as a result? Where is this additional gas? Do you have the infrastructure to collect it?
Terry:The 2014 Flare Gas Report provided by the Ministry of the Economy indicates that over 1.3 million thousand cubic metres of natural gas was reported as flared or vented in 2014, with actual volumes likely higher.
Flared and vented gas is directly associated with oil production in the province, with the majority (over 50 per cent) currently being produced in southeast Saskatchewan. Other areas of significant activity include Shaunavon, Kindersley and Lloydminster.
TransGas is currently engaged with its customer base to ensure that the necessary infrastructure is in place to meet the growing demand for the capture and transportation of flared/vented gas within the province. In the high-volume southeast area, TransGas is beginning work on a two-year capital expansion project that will nearly double the system capacity in that area. In addition, Bayhurst Gas Limited (another SaskEnergy subsidiary), through its Bayhurst Energy Services Corporation, is investing in increasing compression capabilities at the Coleville Gas Plant to provide additional gas processing capacity for the area.
P.N.: Will this additional associated gas collection offset the decline in normal natural gas production in this province, which has flat-lined in recent years (last year had around 10 natural gas targeted wells drilled, down from over 2000 a decade or so ago)?
Terry:Based on available information for the past two years of actual natural gas production in Saskatchewan, the increase in associated gas have been offsetting the decline in traditional natural gas production, with the net production level remaining relatively constant.
P.N.: With the decline of organic gas production in the province, how are things changing for TransGas? Do we need more gas-carrying pipelines from Alberta, or is the current network sufficient?
Terry:Over the last few years, TransGas has transitioned from being a net exporter of natural gas to a net importer, with the corporation now importing more than 50 per cent of its natural gas supply from Alberta.
TransGas has been working to expand its infrastructure at key points on its system in order to address this new demand for additional Alberta supply. In 2014, TransGas completed the Bayhurst-to-Rosetown pipeline project, the largest transmission system capital expenditure of 2014. The 140-kilometre transmission pipeline expansion added approximately 150 TJ per day of transport capacity to the northern part of the transmission system, allowing additional supply to be moved to areas of rapid growth such as North Battleford and Saskatoon. TransGas has also made significant investment in new mobile compression and other facilities designed to increase supply capacity, flexibility and reliability in order to meet the changing energy needs of the province.
P.N.: Is there anything you would like to add?
Terry: SaskEnergy and TransGas are committed to creating a competitive advantage for Saskatchewan through safe, innovative energy solutions, while maintaining safe, reliable service to our more than 380,000 customers across Saskatchewan. Looking for opportunities, like the S-10 directive, to collaborate with the Government of Saskatchewan and private industry on efforts to conserve natural gas and reduce emissions is vital to that commitment.