November
2016
HYDROCARBON
ENGINEERING
104
Canada and the US are two of the largest gas producers in
the world. This has created a domestic supply/demand issue,
which has kept natural gas prices very low.
Partially due to the low natural gas prices in North America,
the domestic gas producers have been actively targeting
reserves with an abundance of natural gas liquids (NGLs) and
condensates. In western Canada, these are predominantly in
the Montney, Duvernay and Horn River plays, located in Alberta
and British Columbia. These resources are located on the east
side of the Canadian Rocky Mountains, approximately
1000 km from the Canadian west coast. Although the
natural gas industry is struggling, due to the low
worldwide oil and gas prices, they are still actively
developing natural gas plays that are high in NGLs and
condensates. These commodities help offset the low
gas prices to make the overall play profitable.
The Canadian climate has always been a challenge
for the oil and gas industry operating there – winters
are long and severe, with many resources located in
remote locations. Dedicated engineers, operators, and
producers have overcome these challenges and
designed a variety of techniques to maximise the
recovery of resources in virtually any environmental
condition. Canadian oil and gas professionals are
routinely hired to provide services in other countries,
due to their diverse skills with gas processing in cold
climates and adverse geographical locations.
Pipeline and transportation
infrastructure
To understand the logic of the Canadian pipeline and
transportation network, its history should first be
reviewed. In the 1960s, Canadian natural gas was
primarily produced and distributed into the Canadian
market from western to eastern Canada. In the 1980s,
the US’ west coast was in need of natural gas, so a
series of pipelines were built from western Canada
along the US’ western seaboard, which are still in
regular use today. Their purpose was to supply
California and the other western coastal states. Then,
in the early 2000s, the US midwest was in need of
natural gas, so pipelines were built between British
Columbia to the Chicago area.
In Figure 2, it is evident that the pipeline network is
heavily concentrated in Alberta, and is primarily
located in the centre of Canada and the US. Currently,
this is the primary method of exporting natural gas
from Canada. Rail and trucks are also used to transport
natural gas, NGLs and condensates, although these are
not generally considered the most effective
transportation methods due to cost and safety.
Due to the supply levels in the US, its need
for Canadian natural gas is projected to decrease
substantially over the next several years. As in
Figure 3, marketable production will grow
alongside Canadian demand, but there is still
excess natural gas, NGLs and condensates to
market to other customers. Canada currently
uses natural gas as its primary fuel for industry,
commercial and residential uses, and it is
primarily transported via pipeline to major
cities.
The gas processing and
midstream industries
Canada, primarily western Canada, houses
hundreds of world class gas processing plants
that are in operation today. They have been
designed and built by some of the best engineers
Figure 1.
A map of Canada. Copyright: 2013 Canadian Centre for
Energy Information.
Table 1.
Annual worldwide gas production ranking
Rank Country
Continent Annual natural
gas production
(m
3
)
Date of
information
– World
–
4 359 000 000 000 2010 est.
1
US
North
America
728 200 000 000 2014 est.
2
Russia
Eurasia
669 700 000 000 2013 est.
– EU
–
164 600 000 000 2012 est.
3
Iran
Asia
162 600 000 000 2012 est.
4
Canada
North
America
143 100 000 000 2012 est.
5
Qatar
Asia
133 200 000 000 2011 est.
6
Norway
Europe
114 700 000 000 2012 est.
7
China
Asia
107 200 000 000 2012 est.
8
Saudi Arabia Asia
103 200 000 000 2012 est.
9
Algeria
Africa
82 760 000 000 2011 est.
10 Netherlands Europe
80 780 000 000 2012 est.
