Canada’s Prolific Montney Shale Drives Pipeline Expansion

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By Damir Kaletovic, Oilprice.com

With oil and gas output still on the upward swing in Canada’s most prolific shale play, despite depressed oil prices, one of the biggest benefactors is a Calgary-based pipeline company with enough demand to fund a 45,000-bpd expansion.

Pembina Pipeline Corp. announced today that it’s planning to boost capacity in response to an uptick in demand from customers in the Montney shale and Deep Basin oilfields, according to a company press release.

An additional 45,000 barrels per day of capacity will be tacked onto Pembina’s Phase V expansion project. The additional capacity will allow it to carry a total of 305,000 bpd of crude oil and condensate through its pipeline.

Storage tanks and a new pumping station will also be added into the extra capacity.

In total, the Pembina’s Phase V expansion project now carries a price tag of over US$310 million (C$385 million), with the approximately US$108 million in additions.

The Montney is Canada’s prized shale region, and it has survived the oil price downturn—much more so than heavy Canadian oil sands, which have seen better days.

The Montney runs from British Columbia into Alberta, in western Canada, and the National Energy Board of Canada estimates gas in place from 80 to 700 trillion cubic feet, with prospective for oil.

The shale has a super liquids-rich window that some analysts believe will make it one of the top plays in Canada—or all of North America.

Pembina’s pipeline expansion plans announced in April—and now further additions—speak volumes as to how the Montney is beating the oil market odds.

In total, Pembina says its customers have already committed to 30,000 bpd in additional capacity, the press release said.

The pipeline runs between Lator and Fox Creek, in central Alberta, and Phase V expansion plans were given the green light for environmental and regulatory requirements in April. The Phase V expansion is expected to begin operating late next year.

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