Calgary-based TransCanada Corp. announced Feb. 15 that it will move forward with a $2.4 billion expansion of its NGTL System in Western Canada. The project aims to connect incremental supply and expand basin export capacity by 1 billion cubic feet per day (Bcf/d) of natural gas at the interconnection with its Canadian Mainline.
NGTL recently completed an open season for existing and export capacity at the Empress/McNeill Export Delivery Point that was oversubscribed. Shippers have executed binding agreements for 1 Bcf/d of expansion capacity for firm service that will commence in November 2020 and April 2021. The average of the contract terms awarded for the expansion capacity is 28.6 years.
“The successful open season shows strong industry support to significantly expand transmission capacity out of the basin and improve market connectivity for Canadian natural gas production,” said Russ Girling, TransCanada’s president and CEO. “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 U.S. Northeast through TransCanada’s Canadian Mainline and downstream systems.”
NGTL also executed contracts for incremental firm receipt service totaling 620 million cubic feet of natural gas per day 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.
“This program will provide much-needed transportation solutions for Western Canadian natural gas producers and unlock access to existing Canadian Mainline capacity,” added Girling. “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 an expansion program that will include approximately 375 km (233 miles) of large diameter pipeline, compression facilities, meter stations and other associated facilities. NGTL anticipates filing a project description with the Canadian National Energy Board (NEB) by the second quarter of 2018 to initiate the regulatory review process for the expansion and, subject to regulatory approvals, it expects construction will begin in 2019.
This $2.4 billion program supplements NGTL’s current ongoing substantial capital expansion program, bringing the total near-term NGTL growth commitment to approximately $7.2 billion.