TransCanada Corp. (TO: TRP, NYSE: TRP) said April 16 that Canada’s National Energy Board (NEB) issued its report recommending federal approval of TransCanada’s proposed CA$1.7 billion North Montney Mainline project.
North Montney Mainline will provide the NOVA Gas Transmission Ltd. System (NGTL System) with new capacity to meet the transportation requirements associated with increased natural gas development from the Montney Basin northeastern British Columbia. The basin and other Western Canadian Sedimentary Basin supplies will be connected to existing and new natural gas markets. Some of these will be emerging LNG markets, TransCanada added. They will provide long-term economic opportunities for British Columbia and its northern communities, the company said.
The NEB also approved the applied-for rolled-in tolling design for the project costs during a transition period. This is subject to certain conditions that TransCanada is reviewing. Following the transition period, TransCanada will have the option of applying to NEB for a revised tolling methodology. It will also have the option to implement stand-alone tolling. TransCanada’s shippers will determine an appropriate approach.
North Montney Mainline will have two large-diameter, 42-inch pipeline sections--Aitken Creek and Kahta. They will total about 301 kilometers (187 miles) in length. The project will also have metering facilities, valve sites and compression facilities. It will include an interconnection with TransCanada's proposed Prince Rupert Gas Transmission project. Prince Rupert will supply natural gas to the proposed Pacific NorthWest (PNW) LNG liquefaction and export facility near Prince Rupert, British Columbia. The Aitken Creek section is scheduled to be in service in 2016, and the Kahta section is scheduled to be in service in 2017.
North Montney Mainline will initially ship about 2.4 billion cubic feet/day (Bcf/d) of natural gas. Progress Energy Canada Ltd., a subsidiary of Malaysia’s Petronas, contracted for 2 Bcf/d of firm receipt service and 2.1 Bcf/d of firm delivery service. Other producers signed contracts for 78 MMcf/d. NGTL is in discussions with other parties interested in obtaining transportation services that would utilize North Montney Mainline.
TransCanada will comply with all regulatory requirements and is evaluating the various conditions the NEB proposed in the report. Under one of the conditions, TransCanada can begin building North Montney Mainline only after a positive final investment decision on the PNW LNG project. The company is proceeding with construction of the Prince Rupert Gas Transmission Pipeline. Also, the company will continue working with affected Aboriginal groups.
Russ Girling, TransCanada's president and CEO, said North Montney Mainline and NGTL System are important parts of the company's CA$46 billion capital growth plan, which includes more than CA$14 billion in proposed natural gas pipeline projects to support British Columbia's LNG industry.
TransCanada is based in Calgary, Alberta.
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