NGTL Pipeline Expansions

NGTL pipeline expansion projects 2021 and 2022 will be completed in Q2 2023. This will alleviate some of the AECO gas discount pressure to Henry Hub gas.

https://www.tcenergy.com/siteassets/pdfs/investors/reports-and-filings/annual-and-quarterly-reports/2022/tc-2022-q3-quarterly-report.pdf

Canadian pipeline imports to U.S. have improved.

 

2021 NGTL System Expansion Program Construction of the 2021 NGTL System Expansion Program continues and, due to current market conditions as well as regulatory and weather delays, the estimated capital cost of the program is $3.5 billion. As of September 30, 2022, $2.7 billion of facilities have been placed into service, with the remaining facilities expected to be placed in service in fourth quarter 2022 and first quarter 2023. The program consists of 344 km (214 miles) of new pipeline, three compressor units and associated facilities and will add 1.6 PJ/d (1.5 Bcf/d) of incremental capacity to the NGTL System.

2022 NGTL System Expansion Program We continue to advance construction of the 2022 NGTL System Expansion Program. As a result of current market conditions, material prices and regulatory delays, the estimated capital cost of the program is $1.5 billion with in-service dates anticipated in fourth quarter 2022 and second quarter 2023. The program consists of approximately 166 km (103 miles) of new pipeline, one new compressor unit and associated facilities and is underpinned by approximately 773 TJ/d (722 MMcf/d) of firm-service contracts with eight-year minimum terms.

NGTL System/Foothills West Path Delivery Program On March 2, 2022, we received further regulatory approvals related to $0.5 billion of facilities, with the remaining approval anticipated in fourth quarter 2022. As a result of terrain complexity, current market conditions, material and labour cost increases and additional permitting conditions, the Canadian portion of the West Path Delivery Program has an estimated capital cost of $1.5 billion, with the first of the facilities' in-service dates anticipated in fourth quarter 2022 and the remaining facilities throughout 2023. The program consists of approximately 107 km (66 miles) of pipelines and associated facilities and is underpinned by 275 TJ/d (258 MMcf/d) of new firm-service contracts with terms that exceed 30 years.

Public Sector Credit Expansion Vs. Private Sector Credit Contraction

In 2009, Marc Faber said these words at one of his famous seminars: 

"But for the fiscal stimulus to even have a small chance of succeeding at reviving economic activity it has to be larger than the private sector credit contraction."

In today's world we have 2 opposing forces, one is Ben Bernanke's public sector credit expansion (Chart 1) and the other is private sector credit contraction (Chart 2). If credit grows, all is well, but when they cancel each other out and credit contracts, a recession will start. To make it easy I took the credit growth chart for the money creation of banks (Chart 1). For the private sector I took the household debt chart (Chart 2).

Bank credit is going up due to money printing:

Chart 1: Bank Credit

Private sector debt is declining due to repayment of debt. I indicated that the savings rate has gone up to 6% now, so I expect more repayments in the future.

Chart 2: Private Sector Credit

If we then add these two charts together we get Chart 3 and the picture isn't pretty. The percentage change in credit has gone negative and is at a historic low. As you can see, each recession (grey bar) is accompanied by a dropping credit and 2008 is by far the worst one. If we don't see a rising trend here, you can expect ugly times ahead.

Chart 3: Credit Expansion/Contraction