By continuing to use this site, you agree to our use of cookies.

Japan

In Japan? You can go to Argus Japan

X

TransCanada mulls lowering Mainline tolls again

14 Feb 2017, 9.34 pm GMT

TransCanada mulls lowering Mainline tolls again

Houston, 14 February (Argus) — TransCanada is again considering new toll proposals for its Canadian Mainline natural gas line that could allow Western Canadian Sedimentary Basin (WCSB) gas to compete against output from the US northeast.

"To retain markets in eastern Canada, WCSB production has to compete with the increasing supply of natural gas that is transported from the Marcellus [and] Utica basins," TransCanada spokesman Shawn Howard said.

Late last year, some shippers proposed new long-term, fixed-price tolls for the Canadian Mainline system, Howard said.

Any potential agreement would be for new volumes.

TransCanada in November cancelled a proposal to lower the toll on the Canadian Mainline system because of lack of interest.

But lower tolls may be the only alternative for Western Canadian producers facing stiff competition as new pipelines bring northeast supplies to key markets in the US midcontinent and Canada.

The Marcellus in Pennsylvania and West Virginia is the largest US gas field by volume, while the Utica, which underlies parts of the Marcellus, is the fastest growing US shale field. Production from those gas-rich formations has been limited by a lack of infrastructure in the northeast.

But the US Federal Energy Regulatory Commission (FERC) earlier this month approved the 3.25 Bcf/d (92mn m³/d) Rover pipeline.

Rover is scheduled to begin partial service by July 2017 and be fully operational by late 2017.

Another project, Spectra Energy and DTE Energy's 1.5 Bcf/d Nexus pipeline is awaiting FERC approval.

DTE said last week it still plans to bring the pipeline on line by the end of the year.

Rover and Nexus will funnel northeast production to key markets in Ohio and Michigan, and deliver gas to the Dawn hub in Canada.

TransCanada's failed to attract commitments for up to 1.4 Bcf/d capacity under 10-year, fixed-price agreements.

That proposed toll ranged from 60-66¢/mmBtu, depending on committed volume, or about half of the toll on Nexus and Rover.

Lowering the rates from the previous proposal should bring shippers to the table, BTU Analytics analyst Marissa Anderson said.

TransCanda declined to comment on terms of the tolls under consideration.

3447891

View more news articles

Share this page

Contact Us

Request a callback

I agree to the Argus privacy policy