TransCanada to go ahead with Canadian mainline system enhancements

TransCanada is going ahead with next step of mainline system enhancements to connect Marcellus gas production to eastern Canadian markets.

The company will proceed with its Vaughan pipeline project and associated facilities as part of $475m investment in pipeline and facility expansions within the Eastern Triangle portion of the Canadian Mainline system.

Construction of the company’s Kings North Connection, Parkway West Connection and Hamilton Area Project are expected to cost around $255m with planned operations in November 2015.

The Vaughan pipeline and related facilities are estimated to cost about $220m and commence operations in November 2016.

TransCanada president and chief executive officer Russ Girling said: "Over the past year, TransCanada has announced plans to invest almost $2 billion in facility enhancements to allow growing supplies of Marcellus gas to reach Ontario and Quebec markets.

"These enhancements help minimise the duplication of infrastructure, reduce delivery costs and improve the diversification of gas supply to markets in Eastern Canada."

In a separate press release, TransCanada unveiled that its subsidiary, NOVA Gas Transmission (NGTL), will contract about 4 billion cubic feet per day (Bcf/d) of firm new contracts which will lead to a system expansion through to 2017 of up to $2.7bn.

The company has received requests from several parties for significant volumes of new firm services on the NGTL System.

Currently, the NGTL System transports over three-quarters of total WCSB production to markets within the basin and to downstream Canadian and US export markets.

The demand for services is anticipated to result in a total of about 4 Bcf/d of incremental firm service contracts.

About 3.1 Bcf/d of the volume relates to firm receipt service and around 0.9 Bcf/d relates to firm delivery service.