NOVA Gas Transmission Ltd. (NGTL), a wholly-owned subsidiary of TransCanada Corp., has signed contracts for 2.7 bcfd of new firm natural gas transportation service that will require a $570-million system expansion for 2018.
The expansion includes multiple projects that total 88 km of 20-48-in. pipeline, one new compressor, 35 new and expanded meter stations, and other associated facilities.
Applications to construct and operate the various components of the 2018 expansion program will be filed with Canada’s National Energy Board between second-quarter 2016 and fourth-quarter 2016. Subject to regulatory approvals, construction is expected to start in 2017, with all facilities expected to be in service in 2018.
The 2018 expansion program will increase the overall investment on the NGTL system beyond the previously reported $7.5 billion in projects. The company says $2.8 billion of those projects have received regulatory approval, with $800 million under construction, and an additional $1.7 billion of facilities are under regulatory review.
The company says significant growth in unconventional natural gas supplies in northwestern Alberta and northeastern British Columbia are the primary driver for the new contracts, coupled with continued growth in market demand.
"The system has been operating at capacity, and more capacity is needed in these key areas that support the growth of the prolific gas resource in the Western Sedimentary basin," said Russ Girling, TransCanada's president and chief executive officer.
The 2018 NGTL expansion program represents the minimum system additions required to meet current contracts. TransCanada says additional expansions may be required following a full assessment of the company’s aggregate system requirements to be completed by the end of 2015.