TransCanada Unveils Plans for $200M Alberta Storage Facility
TransCanada Corp. said last week that it is developing a $200 million natural gas storage facility near Edson, AB. Under the plan, the facility will have a capacity of approximately 50 Bcf and will connect to TransCanada's Alberta System.
In addition, TransCanada said it has recently secured a long-term contract with a third party for up to 40 Bcf of existing, Alberta-based storage capacity. TransCanada said these developments position it to become one of the largest natural gas storage providers in Western Canada. Upon completion of the Edson facility, TransCanada will own or control more than 110 Bcf of storage, or one third of the storage capacity in Alberta.
The company said it intends to be in a position to provide fee-based gas storage services directly to customers by April 2005, with additional capacity available from the Edson facility commencing early in the second quarter of 2006, on a phased-in basis.
TransCanada currently owns 60% of CrossAlta Gas Storage & Services Ltd., which operates a 40-Bcf storage facility near Crossfield, AB. The gas storage business will continue to be operated independently from its regulated natural gas transmission business.
"The Edson facility strengthens our position in the natural gas storage business and will enhance Alberta's position as a major natural gas hub in North America," said Hal Kvisle, TransCanada's CEO. "We have operated in the Western Canada Sedimentary Basin for more than 40 years, we know the gas storage business through our 10-year involvement in CrossAlta, and we see our growth in gas storage as a natural extension of our natural gas transmission business."
The company added that now is the time to be in the storage business because market fundamentals are strong. TransCanada said the imbalance in North American natural gas supply and demand has created natural gas price volatility, resulting in demand for storage service. The company believes Alberta-based storage will continue to serve market needs and could play an important role should Northern gas be connected to North American markets.
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