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TransCanada announces $2.7 billion of NGTL System expansions

Staff writer |
TransCanada Corporation's wholly-owned subsidiary, NOVA Gas Transmission, will contract approximately 4 billion cubic feet per day (Bcf/d) of firm new contracts that will lead to a system expansion through to 2017 of up to $2.7 billion.

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TransCanada has received requests from multiple parties for significant volumes of new firm services on the NGTL System. The requests result from significant growth in unconventional natural gas supplies in northwestern Alberta and northeastern B.C. and in delivery markets in the Western Canada Sedimentary Basin (WCSB), primarily driven by oil sands development and increased demand for gas-fired electric power generation.

The NGTL System currently transports more than three-quarters of total WCSB production to markets within the basin and to downstream Canadian and U.S. export markets. This demand for services is expected to result in a total of approximately 4.0 Bcf/d of incremental firm service contracts. Approximately 3.1 Bcf/d of this volume relates to firm receipt service and about 0.9 Bcf/d relates to firm delivery service.

The estimated capital cost for the 2016/2017 expansion program is approximately $2.7 billion. The investment includes multiple projects that total 540 kilometres (336 miles) of 20 to 48-inch diameter pipeline, seven compressors, 40 meter stations and other associated facilities.

Applications to construct and operate the various components of the 2016/2017 expansion program will be filed with the National Energy Board between fourth quarter 2014 through third quarter 2015. Subject to regulatory approvals, construction should start in 2016 with all facilities expected to be in service by second quarter of 2017.

Approximately $285 million of NGTL System related capital projects have been placed in service in the nine months ended September 30, 2014.

Including the new 2016/17 facilities capital requirements, NGTL has approximately $6.7 billion of projects in development or under construction, which have been or will be filed with the NEB for approval. This includes the $1.7 billion North Montney Mainline and the $1.9 billion Merrick Mainline Pipeline, along with other new supply and demand facilities.

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