TransCanada signs contracts for $570m NGTL system expansion

TransCanada’s wholly-owned subsidiary Nova Gas Transmission (NGTL) has signed contracts for transport of 2.7 billion cubic feet per day (Bcf/d) of natural gas.

For the transportation of additional gas the system requires a $570m expansion by 2018.

The new contracts have been signed to address growth in unconventional natural gas supplies in northwestern Alberta and northeastern British Columbia in Canada.

TransCanada president and CEO Russ Girling said: "Our NGTL System is sitting on top of extensive natural gas supplies, making it well-positioned to unlock the resource and reliably and efficiently link it to growing markets.

"The expansion of the NGTL System is an important part of TransCanada’s industry leading $48bn capital growth plan that includes $23bn of new natural gas pipelines."

According to the company, the expansion programme for 2018 is set to boost the overall investment on the NGTL System beyond the $7.5bn of projects that were previously announced.

Regulatory approval was given to about $2.8bn of these projects, with $800m under construction, and an additional $1.7bn of facilities believed to be under review.

As part of the expansion programme, multiple projects totalling 88km of 20- to 48-inch diameter pipeline, one new compressor in addition to about 35 new and expanded metre stations and other associated facilities would be taken up.

The company plans to file applications with the National Energy Board between the second quarter and the fourth quarter of 2016 to construct and operate different components of the expansion programme.

Construction is subject to regulatory approvals and is expected to commence in 2017.

All facilities are set to be in service in 2018.

The pipeline company said that it may still need additional expansions following a full review of its aggregate system requirements, as the proposed NGTL programme represents the minimum system additions required to meet existing contracts.

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Image: TransCanada signed new contracts to address growth in unconventional natural gas supplies in Canada. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.