TransCanada to Build $6.6 Billion Gas Lines for Petronas Unit
TransCanada will build gas pipelines worth as much as C$6.5 billion ($6.58 billion) to supply a Pacific Coast liquefied natural gas facility being planned by the Canadian unit of state-owned Malaysian energy company Petronas.
TransCanada, the country's largest pipeline operator, said on Wednesday it plans to build a C$5 billion line, the Prince Rupert Gas Transmission Project, to carry 2 billion cubic feet of gas per day from the massive Montney shale gas field in northeastern British Columbia to the LNG export facility being planned by Petronas's Progress Energy Canada unit at Port Edward, near Prince Rupert, British Columbia.
In addition, TransCanada will spend a further C$1 billion to C$1.5 billion to connect the 750-kilometer (465-mile) Prince Rupert Project line to its NOVA regional pipeline network. That will link the new line with gas from other areas of the Montney field as well as gas from Alberta producers.
The project is the second planned by TransCanada to serve the nascent LNG industry on Canada's northern Pacific Coast.
It agreed in June to build a C$4 billion line to carry 1.7 bcf of gas per day from northeastern British Columbia to a LNG facility at the port of Kitimat being planned by Royal Dutch Shell and partners Korea Gas, Mitsubishi and PetroChina.
Northeastern British Columbia contains some of the world's largest unconventional natural gas reserves. The Montney and Horn River shale gas deposits alone contain trillions of cubic feet of gas.
The U.S. market, the traditional destination for Canadian gas exports, is glutted with its own shale gas production, and British Columbia's producers have pinned their hopes on LNG exports to lucrative Asian markets.
Progress Energy Canada, which was formed after Petronas bought Canada's Progress Energy Resources for C$5.2 billion in December, plans to spend up to C$11 billion to build the Prince Edward LNG plant.
Progress Energy Canada and TransCanada expect to finalize definitive agreements on building the pipelines early this year, TransCanada said.
