Canada Approves TC Energy’s Alberta Expansion [UPDATE]
(Adds comments from Alberta energy minister, TC Energy.)
The Canadian government approved October 20 TC Energy’s C$2.3bn (US$1.75bn) expansion plan on its Nova Gas Transmission Limited (NGTL) system in Alberta, eight months after the Canada Energy Regulator (CER) recommended the project be approved.
The so-called NGTL 2021 System Expansion Project will help move growing Western Canadian Sedimentary Basin (WCSB) gas production – primarily from the prolific Montney fairway straddling the Alberta-BC border – to markets in western Canada and the US. WCSB production is expected to reach 22.5bn ft3/day by 2030 from 15.8bn ft3/day last year.
Underpinning the expansion are incremental firm-service delivery contracts amounting to 1.1mn GJ/day – 985,000 GJ/day to domestic markets west of Alberta and export markets in the US Northeast and Midwest and 106,900 GJ/day of intra-basin demand within Alberta.
Originally intended for completion in Q1 2021, the federal delay in approving the project – it was initially expected to be approved in May 2020 – means the project won’t be completed until 2022, although some early capacity might come online in 2021. Construction is expected to create up to 2,920 jobs and add C$1.2bn to Alberta’s GDP, the government said.
Compressor station field work is expected to begin in December 2020, TC Energy said in an advisory, while pipeline construction activities will start in January 2021.
“We’re pleased to be moving forward with this project,” said Tracy Robinson, TC Energy’s executive vice-president, resident Canadian Natural Gas Pipelines and president Coastal GasLink. “This capacity is vital to our customers, our industry and to the people who rely on the energy we deliver.”
NGTL 2021 is a key part of TC Energy’s overall C$9.9bn NGTL infrastructure program now underway that will add 3.5bn ft3/day of incremental delivery capacity between 2020 and 2024.
In Alberta, where much of the construction activity on NGTL 2021 will take place, news of the long-delayed approval by the federal government was welcomed by government officials.
“Despite months of delay, we are pleased the federal government has approved this key infrastructure project, which will create significant economic benefits and good jobs for Albertans, at a time they are needed the most,” Alberta energy minister Sonya Savage said in a statement. “We will review the details of the decision and work with TC Energy… to ensure the project’s success.”
Savage had her own estimates of the project’s impact in Alberta: 5,500 construction jobs, $817mn in labour income for Alberta workers and C$110mn in economic opportunities for indigenous-led companies.
Federal cabinet approval followed a recommendation from the CER in February that the project be approved with 34 conditions related to safety, environmental and wildlife protection, indigenous engagement and protection of indigenous rights and interests. Final federal approval strengthens some of those conditions, related to caribou and indigenous engagement, and adds one more to better address impacts to indigenous rights and caribou habitat.
“We want good projects to get done, moving our natural resources to new markets and creating good jobs,” federal natural resources minister Seamus O’Regan said. “This means meeting our duty to meaningfully consult with potentially impacted indigenous communities and addressing risks to the environment and species at risk.”