TransCanada Corp. (TSX,NYSE:TRP) plans to invest $2 billion expanding its natural gas pipeline network in B.C. and Alberta over the next four years.
TransCanada announced June 14 that it will expand its NOVA Gas Transmission Line (NGTL), a network of pipelines that gather natural gas in the fields of northwest Alberta and northeast B.C.
The expansion is needed to meet increasing production and demand for additional pipeline capacity in the Montney formation straddling the B.C.-Alberta border, and Alberta’s Duvernay and Deep Basin formations.
"Our strategy is to maintain and optimize NGTL's competitive position and to focus on growing our established network to connect growing volumes of Western Canadian Sedimentary Basin natural gas to key market areas,” Karl Johannson, TransCanada's executive vice-president of natural gas pipelines, said in a press release.
Johansson said the $2 billion commitment is part of a total investment commitment of $5.1 billion for the NGTL system – a 25,000-kilometre long interconnected network of natural gas pipelines in Alberta and B.C. that ties into TransCanada's larger 91,500-kilometre network of gas pipelines stitched across North America.
There is a growing demand from producers for additional capacity to serve the U.S. market. The Montney in particular has emerged as a highly competitive, low-cost region that is allowing Canadian producers compete with American gas producers.
TransCanada also recently completed an open season in which producers committed to move more gas through its Pacific Northwest system into California and Nevada.
The expansion will include an additional 273 kilometres of pipeline, 150 megawatts worth of power for compressors and a range of other new infrastructure.
The expansion work is still subject to approvals by the National Energy Board. The company plans to begin the expansion in early 2019, with completion slated for the second quarter of 2021.