June 28, 2023

As producers have migrated activity to the low cost Montney play, NGTL has enhanced capacity along the Western leg upstream of James River (USJR). As a result, the basin has become less geographically diversified with the majority of production now on West portion.

• USJR Capacity has doubled from 6.4 Bcf/d in 2011 to just over 12.5 Bcf/d in early 2023 and over 13.3 Bcf/d in time for the 2023/24 gas year.
• NGTL has been building capacity to keep up, and, as the capacity has been put in-service, the impact of both planned and unplanned maintenance on AECO-HH basis has been exacerbated.
• Going forward, west leg capability should be better matched with USJR receipts allowing AECO-HH basis volatility to be reduced.
• Aitken Creek Storage was connected to NGTL via the North Montney Mainline in January 2020, providing better connectivity between Station 2 and AECO pricing.

Coastal GasLink is expected to be in-service by 2024 with the first train of LNG Canada in-service in 2025. Additional demand will narrow AECO/Station 2-Henry Hub Basis.

TC Mainline tolls are expected to drop as the TC Mainline toll settlement expires in 2026. Western Canada supply then becomes more competitive in Eastern Triangle markets for export – AECO/Station 2 basis should narrow slightly.