TransCanada Corp. reported it will advance a $2.4-billion (Can.) expansion of its NGTL System to connect incremental supply and expand basin export capacity by 1 bcfd of natural gas at the interconnection with its Canadian Mainline.
The company signed agreements with shippers for 1 bcfd of firm service that will begin November 2020 and April 2021 with the average contract term being 28.6 years.
This latest expansion announcement follows close on the heels of TransCanada PipeLines Ltd.’s decision last fall to spike plans for its Energy East Pipeline, which would have carried Alberta crude oil to the Atlantic, and the Eastern Mainline gas pipeline in Ontario (OGJ Online, Oct. 5, 2017). Chief Executive Officer Russ Girling cited “changed circumstances” for pulling the plug on the project.
The Energy East project would have combined construction with conversion of existing pipelines to create a 4,500-km system with capacity of 1.1 million b/d between Hardisty, Alta., and refineries and terminals in eastern Canada. The Eastern Mainline project called for 279 km of new gas pipeline between Markham and Brouseville, Ont.
Expansion details
NGTL recently completed an open season for existing and export capacity at the Empress-McNeill Export Delivery Point that was oversubscribed.
“We continue to work diligently with industry to facilitate economic access for their natural gas to key export markets, including access to Eastern Canada and the US Northeast through TransCanada’s Canadian Mainline and downstream systems,” Girling said.
NGTL also executed contracts for incremental firm receipt service totaling 620 MMcfd of gas beginning in April 2021. These contracts will connect new supply in the low-cost Montney, Deep basin, and Duvernay plays to the NGTL System and provide shippers access to various local and export markets, the company said.
Girling said, “This program will provide much-needed transportation solutions for Western Canadian natural gas producers and unlock access to existing Canadian Mainline capacity. The NGTL System is a strategic TransCanada asset and we are committed to providing shippers with timely and competitive options to connect growing basin supply to downstream markets throughout North America.”
The incremental receipt and export delivery contracts will drive a $2.4 billion expansion program that will include 375 km of large-diameter pipeline, compression facilities, meter stations, and other associated facilities.
NGTL anticipates filing a project description with Canada’s National Energy Board by this year’s second quarter. It expects construction will begin in 2019.
This recent expansion announcement supplements NGTL’s ongoing capital expansion program, bringing the total near-term NGTL growth commitment to $7.2 billion.