TransCanada Corp. has big plans to add capacity to one of its subsidiary pipeline systems. The NOVA Gas Transmission Ltd. (NGTL) will contract approximately 4 billion cubic feet per day (Bcf/d) of firm new contracts that will lead to a system expansion through to 2017 of up to $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 British Columbia and in delivery markets in the Western Canada Sedimentary Basin (WCSB), primarily driven by oil sands development and increased demand for gas-fired electric power generation.
“Expansion of the NGTL System is an important part of TransCanada’s industry leading $46 billion capital growth plan that includes $20 billion of new natural gas pipelines,” said TransCanada president and CEO Russ Girling. “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 U.S. export markets. This demand for services is expected to result in a total of approximately 4 Bcf/d of incremental firm service contracts. Approximately 3.1 Bcf/d of this volume relates to firm receipt service and about 0.9 Bcf/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,” Girling said. “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 program is approximately $2.7 billion. The investment includes multiple projects that total 540 km of 20- to 48-in. diameter pipeline, seven compressors, 40 meter stations and other associated facilities. Applications to construct and operate the various components of the expansion program will be filed with the Canadian National Energy Board (NEB) between the fourth quarter of 2014 through the third quarter of 2015. Subject to regulatory approvals, TransCanada expects to begin construction in 2016 with all facilities to be in service by the second quarter of 2017.
Approximately $285 million of NGTL System related capital projects have been placed in service in the from the beginning of the year to Sept. 30, according to a Nov. 4 company statement. Including the new 2016-2017 facilities capital requirements, NGTL has approximately $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 $1.7 billion North Montney Mainline and the $1.9 billion Merrick Mainline Pipeline, along with other new supply and demand facilities.Tags: natural gas, NGTL, TransCanada