TransCanada revealed its decision to proceed with a C$1.5bn ($1.14bn) expansion of its NOVA Gas Transmission System (NGTL System) in Alberta, Canada to connect existing and new supply in the Western Canadian Sedimentary Basin (WCSB) to increased intra-basin market demand.
The latest NGTL System expansion project will see addition of nearly 197km of large diameter pipeline along with construction of three compression units, meter stations and related facilities.
According to TransCanada, the pipeline expansion project is backed by nearly 1.1 billion cubic feet per day of new firm service contracts.
Till date, shippers have committed for a combined 754 million cubic feet per day (MMcf/d) of incremental firm delivery services starting from April 2022. This capacity will help the expanded NGTL System address the increasing market demand in the power generation, oil sands, petrochemical, industrial and utilities segments in Alberta, said TransCanada.
Concurrently, shippers have also executed 377 MMcf/d of firm receipt services starting from November 2021 that will link incremental supply from the Montney plays and Deep Basin to the NGTL System. The contracts have terms in the range of 8-20 years.
TransCanada expects to file applications with the National Energy Board seeking approvals for construction and operation of the facilities related to the expanded pipeline system in the second quarter of next year.
The company anticipates construction on the NGTL System expansion project to commence as early as the third quarter of 2020 should it receive regulatory approvals. It expects to make most of the capital investment on the project in 2021 and 2022.
TransCanada president and CEO Russ Girling said: “The NGTL System continues to expand as parties require and contract for greater pipeline capacity to meet the growing demand for clean-burning natural gas from domestic and export markets,” said Russ Girling, TransCanada’s president and chief executive officer.
“This new investment brings the capacity expansion programs underway on the NGTL System to more than $9 billion.”
The NGTL System, which is currently 24,012km long, delivers natural gas sourced from Alberta and Northeast British Columbia to markets in Canada and the US.
The new 197km expansion of the pipeline system is part of the larger C$7.3bn ($5.57bn) multi-year infrastructure expansion program aimed at boosting transportation capacity for Western Canadian producers and offer downstream markets increased access to natural gas.