Ziff Energy Launches Western Canada NGL Supply and Infrastructure Growth Study

Ziff Energy, a division of HSB Solomon Associates, and Gas Processing Management Inc. (GPMi) announced the launch of their Western Canada Natural Gas Liquids (NGL) Supply and Infrastructure Growth Study – Impact of LNG Development. The study analyzes NGL production driven by natural gas as feedstock to the developing LNG facilities in British Columbia and Oregon.

The proponents of 16 natural gas liquefaction and export facilities have applied to the Canadian National Energy Board for licenses to export gas volumes or have announced potential projects. More than 30 billion cubic feet per day (Bcf/d) of natural gas feedstock may be required from a basin that currently produces 13 Bcf/d—a sizeable potential production, investment, and activity growth opportunity. These growth NGL volumes from the Cretaceous, Duvernay, and Montney formations, when coupled with the requirement for higher Btu LNG feedstock gas, will drive substantial changes into the Western Canada NGL systems.

“It is no longer the lower price of Canadian gas that will drive activity levels,” said Bill Gwozd, P.Eng., Senior Vice President of Gas Services at Ziff Energy. “Instead, it is the full-cycle cost of drilling and field exploitation, gas gathering and processing, gas transport to the West Coast, gas liquefaction, LNG tankers to Asia, and regasification for Asian gas utilities and industrials that will determine the ultimate volume of LNG that will be harvested from Canada.”

The Western Canada NGL Supply and Infrastructure Growth Study – Impact of LNG Development will:

• Forecast ethane, propane, butane, and condensate volumes to 2035 based on the developing gas production analyzed in the recently announced Gas West for LNG Growth Study.
• Assess the impact of growing NGL production on NGL pipeline transportation, straddle plants, fractionation, cavern storage, and other infrastructure.
• Analyze the NGL required for LNG heat content management of the LNG facilities to achieve the needs of the Asian industrial and utility markets.
• Complete a supply and demand balance for ethane, propane, butane, and condensate for Western Canada to 2035 as required by the huge growth in NGL production volumes.
• Identify opportunities for additional NGL markets and required NGL infrastructure as driven by gaps in the supply/demand balance.
• Scrutinize the development plans for leading NGL infrastructure operators and identify other opportunities that could be considered.

The Western Canada NGL Supply and Infrastructure Growth Study – Impact of LNG Development, an important step toward understanding NGL as a specific product focus, will be released in the fourth quarter of 2014. This study is the sixth in a six-study series, titled Western Canada Gas Supply and Infrastructure Study, which are supported by 55 industry subscriptions and 25 different companies.

• The four completed studies in the series are as follows:
• South Montney Tight Gas Growth, January 2012
• Tight Gas and North Duvernay Growth, June 2012
• South Duvernay Growth, February 2013
• North Montney and Shale Gas Analysis, November 2013

The series’ fifth study, titled Western Canada Gas Supply and Infrastructure Growth Study – Gas West for LNG, will analyze similar issues related to LNG. This study will be available in the summer of 2014.

“The completed studies provide important and timely analyses that detail the resource and optimize the development of the infrastructure for the gas growth regions in Western Canada from an independent and unbiased perspective,” said Bob Child, P.Eng., Principal at GPMi and study co-author. “They focus on optimizing capital, reducing operating expenses, enhancing product recoveries, and shortening cycle times as if an industry team owned all the resources and assets.”

The Western Canada NGL Supply and Infrastructure Study – Impact of LNG Development is based on publically available data sources. No data is requested from study subscribers. Due to the developing nature of the area infrastructure, Ziff Energy and GPMi may conduct interviews with operators of existing and developing infrastructure to ensure that the study uses the most current data.

Ziff Energy and GPMi will jointly analyze and develop the strategic analysis for the owners and operators of the NGL system, production, and infrastructure, and for investors, governments, and interested parties to consider.