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TransCanada Invests $1.5 Billion In Gas Pipeline Expansion

A US$1.5 billion investment by TransCanada Corp will expand an existing natural gas gathering pipeline in western Canada, according to nation’s second-largest pipeline operator.

The project will allow greater quantities of Canadian gas to reach other North American markets by connecting Monterey, Duvernay, and Deep Basin’s resources to the NOSA transmission system in Alberta.

Commercial use of the expanded pipeline will begin in 2021, with construction taking off in 2019, provided approvals from the National Energy Board. Production contracts worth three billion cubic feet of gas per day for the NOVA system justify the added capacity, TransCanada says.

Plans for new liquified natural gas plants on Canada’s western coasts are indefinitely on hold, meaning gas producers need other cost-effective methods of transporting their goods to markets.

Pipeline availability in the oil sector is also a concern, a report by the Canadian Association of Petroleum Producers said yesterday.

“We have been operating in a pipeline world where we have been at full capacity,” CAPP President Tim McMillan said. “It’s like a freeway that’s always in gridlock.”

TransCanada’s Keystone XL pipeline received the green light from President Donald Trump’s administration shortly after the January inauguration, but the project still faces opposition in states that will host the facility.

Related: Putin’s Newest Oil Play: Russia Gains Foothold In Iraqi Oil Patch

The slowdown in new pipeline capacity has caused a boom in business for rail transporters of crude. Last week, Houston-based USD Partners announced an expansion of terminal capacity in Oklahoma to accommodate increasing demand for the company’s services.

“This transaction reinforces the strategic positioning of our Hardisty asset and confirms our long-held view that rail will continue as an important component of midstream transportation infrastructure in Western Canada,” USD VP of commercial development in Canada, Jim Albertson, told Fuel Fix.

By Zainab Calcuttawala for Oilprice.com

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