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TransCanada to move ahead with NOVA expansion

14 Jun 2017 17:34 (+01:00 GMT)
TransCanada to move ahead with NOVA expansion

Houston, 14 June (Argus) — TransCanada will move forward with a C$2bn ($1.5bn) expansion of its NOVA Gas Transmission (NGTL) pipeline, which is expected to deliver nearly 3 Bcf/d (85mn m³) of additional natural gas into the system.

The expansion will connect Montney, Duvernay and Deep Basin gas production in western Canada to the NGTL system and move it to intra-basin and export markets, the Calgary-based midstream company said.

Construction is slated to begin in early 2019. Initial projects are expected to be in service by the fourth quarter of 2019, and final projects are expected to be in service by the second quarter of 2021.

The expansion includes multiple projects, including 171 miles (273km) of pipeline, 150 MW of compression at five compressor stations, new meter stations and other associated facilities.

Applications for the various projects will be filed with Canada's National Energy Board (NEB), starting in the fourth quarter of 2017.

TransCanada said that shippers had signed over 2.6 Bcf/d in total new firm supply contracts at multiple existing and proposed new receipt locations across the system.

The NGTL expansion was originally designed to deliver Montney shale gas to the Pacific NorthWest LNG export project on Lelu Island, British Columbia.

But falling oil prices and cheaper US LNG projects have damaged the economics of Canadian LNG export projects, leading to a delay of the project.

Despite this, TransCanada said there was enough North American demand for Montney shale gas to justify the expansion.

The 15,251-mile NGTL system is the primary gathering system for the Western Canadian Sedimentary basin, moving gas production from the Duvernay, Montney, Horn River, Cordova and Liard basins to major markets in Alberta, British Columbia and the US.