TransCanada Adds $9 Billion to Project Backlog

Researched by Industrial Info Resources (Sugar Land, Texas)--Placing approximately C$4 billion ($3 billion) of new assets into service in 2018, TransCanada Corporation (NYSE:TRP) (Calgary, Alberta) also added C$12 billion ($9 billion) to its project backlog. Industrial Info is tracking more than $15 billion in active TransCanada projects.

In the company's fourth-quarter 2018 earnings conference call, Chief Executive Officer Russ Girling spoke about TransCanada's projects. When Royal Dutch Shell (NYSE:RDS-A)-led LNG Canada (Kitimat, British Columbia) announced a positive final investment decision on its liquefied natural gas (LNG) plant in Kitimat (see project report), TransCanada began actively developing its Coastal GasLink Pipeline, which will supply natural gas to the plant. Speaking of the project, Girling said, "The C$6.2 billion ($4.7 billion) project will have an initial capacity of approximately 2.1 billion cubic feet a day (Bcf/d), with a potential expansion capacity of up to 5 Bcf/d. All of the necessary regulatory permits have been received to allow us to proceed with construction activities, and Coastal GasLink has signed long-term agreements with all 20 elected First Nations along the pipeline right of way. ...Most of the construction spend on Coastal GasLink is expected to occur in the 2020 and 2021 period, and we are exploring joint venture partners and project financing alternatives for the project." For more information, see Industrial Info's project report.

TransCanada also is underway with several natural gas pipeline projects in the U.S. Girling said, "In addition to moving record volumes on our existing systems during the fourth quarter and early into this year, we also continued to advance $6.7 billion of expansion projects, including Columbia's WB, Mountaineer and Gulf XPress projects." The $900 million WB Xpress project entered service in the fourth quarter. The 1.3-Bcf/d pipeline carries natural gas in Virginia and West Virginia. Apex Pipeline Services Incorporated (Winfield, West Virginia) served as general contractor on the project. For more information, see Industrial Info's project reports on the Virginia and West Virginia portions of the pipeline.

The Mountaineer Xpress Pipeline runs from Marshall County to Wayne County, West Virginia, and will transport 2.7 Bcf/d. Construction began early last year. Girling said that about 60% of the project is in service. The remainder is expected to be in service this quarter. The project has an estimated total investment value (TIV) of $270 million. For more information, see Industrial Info's project reports on Spread 1, Spread 2, spreads 3 and 4, and spreads 5 and 6.

Last week, the U.S. Federal Energy Regulatory Commission authorized TransCanada to place 60% of the Gulf Xpress project into service. The project included construction of seven compressor stations to increase gas flows in Kentucky, Mississippi and Tennessee. The project cost $600 million. For more information, see Industrial Info's project reports on the compressor stations in or near:

• Lancaster, Kentucky
• Morehead, Kentucky
• Edmonton, Kentucky
• Waynesboro, Tennessee
• Nashville, Tennesee
• Grenada, Mississippi
• New Albany, Mississippi

Girling also spoke of the company's beleaguered Keystone XL Pipeline, which will carry oil from Alberta to the U.S. Gulf Coast. Girling said, "During the quarter, we also continued to advance Keystone XL. In Nebraska, as you know, we received approval of a route in that state. However, that decision has been challenged. We expect the Nebraska Supreme Court to reach a decision in the first quarter of 2019 with respect to that appeal of the Nebraska Public Service Commission's approval of the route." Girling said that TransCanada had negotiated easements on approximately 80% of the route in Nebraska. For more information, see Industrial Info's project report on the Nebraska section of the pipeline. Girling said some preconstruction activity has begun on the pipeline.

While TransCanada is primarily known as a pipeline company, the company also has Power Industry projects, including the Napanee natural gas-fired power plant in Ontario. Construction on the 900-megawatt plant began in early 2015. Girling said, "Construction on Napanee is essentially complete, and commissioning activities are well underway. We expect the facility to be placed into service in the second quarter." The project has an estimated TIV of $1.2 billion. Matrix North American Construction Limited (Burlington, Ontario) is providing engineering, procurement and construction services. For more information, see Industrial Info's project report.

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