• Natural Gas News

    TransCanada Sets Another Expansion Plan

Summary

New facilities directed at incremental Alberta demand.

by: Dale Lunan

Posted in:

Natural Gas & LNG News, Americas, Corporate, Investments, Contracts and tenders, Infrastructure, , News By Country, Canada

TransCanada Sets Another Expansion Plan

Canadian pipeline company TransCanada said October 31 it will move ahead with a C$1.5bn (US$1.14bn) expansion of its Nova Gas Transmission Limited (NGTL) system to connect existing and new supplies in the Western Canadian Sedimentary Basin to incremental intra-basin market demand.

The program is underpinned by about 1.1bn ft3/day of new firm service contracts, including 754mn ft3/day of incremental firm delivery services starting in April 2022 and 377mn ft3/day of incremental firm receipt services beginning in November 2021.

The delivery service contracts will connect growing Alberta demand in the power generation, oil sands, petrochemical, industrial and utilities segments, while the receipt service will connect incremental supplies from the Montney and Deep Basin to the NGTL system. The contracts have terms ranging from eight to 22 years, TransCanada said.

“The NGTL system continues to expand as parties require and contract for greater pipeline capacity to meet the growing demand for clean-burning natural gas from domestic and export markets,” TransCanada CEO Russ Girling said. “This new investment brings the capacity expansion programs underway on the NGTL System to more than $9 billion.”

A chronic lack of pipeline take-away capacity in western Canada – to serve both domestic and export markets – is a key reason why natural gas commodity prices at the AECO trading hub in Alberta have been at record low levels the past two years, at times falling into negative territory. Producers have been calling on TransCanada to increase capacity on the NGTL system and at export delivery points, but for some, the expansion efforts are taking too much time.

“I wish they’d quit contracting and start building,” one producer, who requested anonymity, told NGW in an email November 1. “It’s taking way too long – by the time they add the capacity, half the companies that have signed these contracts will have gone under.”

This latest NGTL expansion consists of about 197 km (122 miles) of large diameter pipe, three compressor units, meter stations and associated facilities. Applications for approval to build and operate the new facilities will likely be filed with the National Energy Board in 2Q 2019, and pending receipt of regulatory approvals, construction could start as early as 3Q 2020, with the majority of the capital investment expected to occur in 2021 and 2022.