Western Canada's Natural Gas Boom Takes Shape Amid Concerns Over Rule Durability

The natural gas and LNG sectors in Western Canada are experiencing significant growth, driven by increasing demand and investment in new projects. Companies such as Pembina Pipeline, TC Energy, Enbridge, Tourmaline Oil, AltaGas, Keyera, and Fortis are all reporting progress on their respective initiatives. For example, Pembina has completed the construction of a new fractionator at its Redwater complex near Edmonton, while TC Energy estimates that North American natural-gas demand will grow by about 51 billion cubic feet a day between 2025 and 2035.

Enbridge is also making significant strides in the sector, with the company beginning construction on the C$4-billion Sunrise Expansion Program on its Westcoast system in British Columbia. The project aims to increase T-South transportation capacity by about 300 million cubic feet a day, with service targeted for late 2028.

However, not all oil-sands production and export capacity projects are moving forward as planned. The proposed West Coast Oil Pipeline, which would have seen Pembina participating on a non-binding basis, has been met with caution from the company, which reserved full discretion over its own final investment decision and stipulated that it would put no at-risk development capital into the project before making it.

Overall, while there are signs of growth in the natural gas and LNG sectors, there remain concerns about the durability of rules governing that growth. Companies are investing heavily in new projects, but they need to be confident that these investments will yield returns over decades, not just years.