TransCanada to Invest C$2 Billion in NOVA Gas Pipeline Expansions

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Researched by Industrial Info Resources (Sugar Land, Texas)--TransCanada Corporation (NYSE:TRP) (Calgary, Alberta) says it will spend C$2 billion (US$1.5 billion) between now and 2021 to expand its NOVA Gas Transmission Ltd. (NGTL) pipeline system as a result of growing producer demand to move natural gas in Western Canada to intra-basin and North American export markets. Industrial Info is tracking more than $30 billion in TransCanada projects, including several that are connected to the NGTL system.

TransCanada said in a press release the planned investments are based on new contracted customer demand for about 3 billion cubic feet per day (Bcf/d) of incremental firm receipt and delivery services. The expansions will help move natural gas from the Montney, Duvernay and Deep Basin regions. Shippers have signed more than 2.6 Bcf/d in total new firm supply contracts across the pipeline system, the company said. TransCanada also concluded a recent expansion open season for incremental service at the Alberta/British Columbia export delivery point, which connects Canadian supply through downstream TransCanada pipelines to Pacific Northwest, California and Nevada markets. The open season was over-subscribed, and 381 million cubic feet per day of available expansion service was awarded under long term contracts.

Karl Johannson, TransCanada's executive vice-president and president, Canada and Mexico natural gas pipelines and energy, said the planned expansion adds to the current C$5.1 billion (US$3.9 billion) near-term capital program for the NGTL system.

The expansion program will include 171 miles of pipeline, 150 megawatts (MW) of compression at five compressor stations, new meter stations and other associated facilities, the company said, adding it will file applications for the projects with the National Energy Board starting in the fourth quarter of 2017. Construction is expected to start in early 2019, with initial projects expected to be in service in fourth-quarter 2019 and final projects in service by second-quarter 2021.

Industrial Info is tracking US$365 million in investments that are tied to NGTL expansions that are expected to kick off construction in 2017. Among them is an US$85 million pipeline loop to transport up to 2.7 Bcf/d of natural gas from the Alces Compressor Station in Grand Prairie, Alberta to the Owl Lake South Meter Station near the Alberta-British Columbia border in Clear Hills County, Alberta. Construction began in April, with completion expected in December. Stantec Incorporated (NYSE:STN) (Edmonton, Alberta) is the project engineer. For more information, see Industrial Info's project report. For related information, see June 1, 2017, article - Stantec Takes Part in $3.45 Billion in Projects Set to Wrap Up this Year.

TransCanada spent C$1.8 billion (US$1.4 billion) in the first quarter this year as part of its C$23 billion (US$17 billion) capital-near term program. For related information, see May 17, 2017, article - Awaiting Keystone XL Decision, TransCanada Spends $1.8 Billion on Capital Projects in First Quarter.

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