Painted Pony Petroleum said that it has signed an agreement to provide Spectra Energy with long-term natural gas transportation to serve its growing British Columbia production base.
The company informed in a statement that the contract with Spectra Energy Transmission for 220 MMcf/d of firm capacity on the T-North pipeline, expected to commence on November 1, 2016. The contract carries a term of 25 years on 200 MMcf/d and a term of 18 years, 8 months on 20 MMcf/d.
The expected commencement of the Spectra Energy contracted service has been timed to coincide with the start-up of the planned AltaGas Townsend area gas processing plant, which is scheduled to be operational by mid-year 2016. Following commissioning and start-up of this new facility, Painted Pony’s sales volumes are forecast to reach a total of 240 MMcfe/d by the end of 2016, which includes a minimum 150 MMcf/d of incremental volumes from the AltaGas Townsend Facility.
The Spectra Energy contract provides Painted Pony with the option to deliver up to 220 MMcf/d to one of two receipt points – either Station ‘2’ or Sunset Creek. Deliveries at Station ‘2’ provide the ability to supply proposed LNG export facilities and traditional Pacific northwest markets in Canada and the United States. Deliveries at Sunset Creek provide a potential future connection into the Alberta natural gas pipeline network, servicing the AECO hub and eastern markets.
The company said it remains confident that a strong demand for LNG exports will develop for British Columbia gas producers and this contract provides a mechanism for transportation into LNG export schemes, including the proposed AltaGas-Idemitsu Douglas Channel project at Kitimat, expected to come on-stream in 2018.
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Image: Painted Pony