TransCanada announces new NGTL System expansions

TransCanada Corporation has announced that its wholly-owned subsidiary, NOVA Gas Transmission Ltd. (NGTL), will contract approximately 4 billion ft³/d of firm new contracts that will lead to a system expansion through to 2017 of up to US$ 2.7 billion.

TransCanada has received requests from multiple parties for significant volumes of new firm services on the NGTL System. The requests result from significant growth in unconventional natural gas supplies in northwestern Alberta and northeastern B.C. and in delivery markets in the Western Canada Sedimentary Basin (WCSB), primarily driven by oilsands development and increased demand for gas-fired electric power generation.

"Expansion of the NGTL System is an important part of TransCanada's industry leading US$ 46 billion capital growth plan that includes US$ 20 billion of new natural gas pipelines," said Russ Girling, President and Chief Executive Officer of TransCanada. "The system plays a key role in meeting growing supply and demand requirements within the WCSB and North America."

The NGTL System currently transports more than three-quarters of total WCSB production to markets within the basin and to downstream Canadian and US export markets. This demand for services is expected to result in a total of approximately 4 billion ft³/d of incremental firm service contracts. Approximately 3.1 billion ft³/d of this volume relates to firm receipt service and about 0.9 billion ft³/d relates to firm delivery service.

"These new customer requests cover supply and market areas that are core to the NGTL System's geography and services," added Girling. "Capturing these incremental volumes and constructing the new facilities will position NGTL well into the future and enhance the long-term economic viability of the system."

The estimated capital cost for the 2016/2017 expansion programme is approximately US$ 2.7 billion. The investment includes multiple projects that total 540 km (336 miles) of 20 - 48 in. diameter pipeline, seven compressors, 40 meter stations and other associated facilities. Applications to construct and operate the various components of the 2016/2017 expansion programme will be filed with the National Energy Board between fourth quarter 2014 through third quarter 2015. Subject to regulatory approvals, construction should start in 2016 with all facilities expected to be in service by second quarter of 2017.

Approximately US$ 285 million of NGTL System related capital projects have been placed in service in the nine months ended 30^th September, 2014. Including the new 2016/17 facilities capital requirements, NGTL has approximately US$ 6.7 billion of projects in development or under construction, which have been or will be filed with the NEB for approval. This includes the US$ 1.7 billion North Montney Mainline and the US$ 1.9 billion Merrick Mainline Pipeline, along with other new supply and demand facilities.

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/project-news/05112014/transcanada-announces-us27-billion-of-new-ngtl-system-expansions/