Pipeline Profiles: NOVA Gas Transmission Ltd.(NGTL)

Sources: NOVA Gas Transmission Ltd., NEB

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The NOVA Gas Transmission Ltd. system (NGTL) consists of more than 25,000 km of natural gas pipeline and associated facilities located in Alberta and northeastern British Columbia. NGTL has over 1,100 receipt points and over 300 delivery points. The system came under NEB jurisdiction in 2009. NGTL is expanding at a rapid pace, adding more than $2 billion in facilities between 2010 and 2015. New supply has entered the system, particularly from the Montney formation in the northwest portion of the system. Throughput information is provided for four areas: Upstream James River, North and East, West Gate and East Gate.

In 2016, intra-Canada capacity at East Gate averaged 122.49 million cubic metres per day (4.33 billion cubic feet per day) and throughput averaged 125.53 million cubic metres per day (4.43 billion cubic feet per day). The average utilization of East Gate in 2016 was 102%.

Flows measured at East Gate are intra-Canada. East Gate flows represent throughputs in the southeastern portion of the NGTL system, and contain deliveries to interconnects with TransCanada's Canadian Mainline (near Empress, Alberta) and TransCanada's Foothills Pipeline (near McNeill, Alberta).

In 2016, intra-Canada capacity at West Gate averaged 59.77 million cubic metres per day (2.11 billion cubic feet per day) and throughput averaged 58.8 million cubic metres per day (2.08 billion cubic feet per day). The average utilization of West Gate in 2016 was 99%.

Flows measured at West Gate are intra-Canada. West Gate flows represent throughputs in the southwestern portion of the NGTL system, and contain deliveries to an interconnect with TransCanada's Foothills Pipeline.

In 2016, intra-Canada capacity at Upstream of James River averaged 238.5 million cubic metres per day (8.42 billion cubic feet per day) and throughput averaged 235.22 million cubic metres per day (8.31 billion cubic feet per day). The average utilization of Upstream of James River in 2016 was 99%.

Flows measured at Upstream of James River are intra-Canada. Upstream of James River flows represent throughputs in the northeastern potion of the NGTL system. Upstream of James River flows contain receipts from the Horn River and the Groundbirch pipelines (part of NGTL).

In 2016, intra-Canada capacity at North and East averaged 124.14 million cubic metres per day (4.38 billion cubic feet per day) and throughput averaged 91.31 million cubic metres per day (3.22 billion cubic feet per day). The average utilization of North and East in 2016 was 74%.

Flows on the North and East segment of NGTL are intra-Canada. The North and East segment flows represent throughputs to delivery areas in northern Alberta, including natural gas used for oil sands operations.

The physical capacity of a pipeline is based on many factors such as the product(s) being carried, direction of flow, ambient temperature, pipeline compression, and maintenance work or other pressure restrictions. The operational capacity at each key point may also reflect contracts for transportation service, and supply and demand across the system. The actual physical capacity of the pipeline may be higher than the assumed operational capacity stated here.

Open data can be freely used, modified and shared by anyone for any purpose. The data for these graphs are available here.

Key Developments

Last updated: August 2016

NGTL is expanding at a rapid pace, adding more than $2 billion in facilities between 2010 and 2015. New supply has entered the system, particularly from the Montney formation in the northwest portion of the system. Capacity is constrained in some parts of these rapidly growing areas and NGTL is adding additional facilities.

Regulatory Documents

Last updated: August 2016

Tolls

Last updated: August 2016

NGTL operated under revenue requirement settlements for 2010-2015.

Figure 1 shows the NGTL benchmark toll Note 1 (firm receipt toll, plus delivery toll to Group 1 locations) and the GDP deflator (normalized) for 2010-2015. The benchmark toll declined in 2011 and 2012 with higher throughput and increased in line with the GDP deflator from 2012 through 2015 as system costs and throughput both increased.

Figure 1: NGTL Benchmark Toll

Figure 1: NGTL Benchmark Toll

Source: NEB

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This graph shows the NGTL benchmark toll as a solid red line and the GDP deflator as a black dashed line. The benchmark toll decreased from $0.38 in 2010 to a low of $0.34 in 2012 and was back up to $0.38 in 2015.

Financial

Last updated: August 2016

NGTL’s revenue, net income and rate base have been growing due to system expansions and increased throughput. NGTL’s financial ratios have remained stable and its credit ratings remain investment grade.

Table 1 : NOVA Gas Transmission Ltd.
NOVA Gas Transmission Ltd. 2010 2011 2012 2013 2014 2015
Revenues (millions) $1 117.1 $1 200.2 $1 354.4 $1 506.4 $1 614.4 $1 767.1
Net Income (millions) $194.1 $195.6 $198.1 $232.0 $228.5 $245.3
Rate Base (millions) $4 834.2 $4 878.1 $5 177.6 $5 670.7 $5 917.2 $6 094.1
Deemed Equity Ratio 40% 40% 40% 40% 40% 40%
Return on Equity 10.04% 10.03% 9.57% 10.23% 9.65% 10.06%
Interest and Fixed Charges Coverage RatioTable Note a 2.18 2.16 2.1 2.34 2.19 2.11
Cash Flow to Total Debt and Equivalents RatioTable Note a 14.3% 13.5% 12.6% 13.6% 12.6% 12.3%
DBRS Credit Rating A A A A (low) A (low) A (low)
S&P Credit Rating A- A- A- A- A- A-
Moody’s Credit Rating A3 A3 A3 A3 A3 A3

 

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