Shell lets pipeline contract to TransCanada for LNG Canada

Shell Canada Ltd. and its partners have selected TransCanada Corp. to design, build, own, and operate the proposed 700-km, 1.7 bcfd Coastal GasLink, a $4 billion pipeline that will transport natural gas from the Montney gas-producing region near Dawson Creek, BC, to LNG Canada’s recently announced LNG export facility near Kitimat, BC (OGJ Online, May 16, 2012). LNG Canada partners include the venture’s leader Shell, along with partners Korea Gas Corp., Mitsubishi Corp., and PetroChina Co. Ltd.

Gas for Coastal GasLink will be sourced from Montney, Horn River, and Cordova basins and elsewhere in the Western Canada Sedimentary Basin. TransCanada expects construction on the project to take 2-3 years, with a 2018-19 in-service date pending regulatory and corporate approvals.

TransCanada has roughly 24,000 km of pipelines operating in Western Canada, including 240 km of pipelines in service in northeast British Columbia, with another 125 km of proposed additions either already having received regulatory approval or undergoing regulatory review. These pipelines are part of TransCanada's Nova Gas Transmission Ltd. (NGTL) system. The company’s Foothills pipeline system also operates in British Columbia.

In addition to moving British Columbia gas to the West Coast, TransCanada says Coastal GasLink will provide options for shippers to access gas supplies through an interconnection with its NGTL System and Nova Inventory Transfer trading hub. A proposed contractual extension of NGTL using Coastal GasLink pipeline capacity, to a point near Vanderhoof, BC, will allow NGTL to offer delivery service to interconnecting gas pipelines serving the West Coast. NGTL plans to hold an open season for such service late in 2012.

Contact Christopher E. Smith at chriss@ogjonline.com.

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