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TransCanada Wins Approval for Another NGTL Expansion

A day after completing the latest expansion, TransCanada Corp. won approval for the next addition to its supply collection grid in Alberta and British Columbia, Nova Gas Transmission Ltd. (NGTL).

The National Energy Board (NEB) on Wednesday authorized a CDN$570 million (US$456 million) pipeline and compressor package called the Saddle West Expansion. The project is scheduled to add capacity of 362 MMcf/d next year.

The ruling arrived on the heels of TransCanada’s Tuesday announcement that NGTL placed the final section of its CDN$1.7 billion (US$1.4 billion) 2017 Expansion Program into service. The expansion added 500 MMcf/d of capacity to the system.

The facilities additions continue a tradition of annual construction projects throughout NGTL’s 64-year history of evolution into a 24,320-kilometer (14,590-mile) pipeline web spanning most of the Western Canada Sedimentary Basin.

The new packages continue the pattern by responding to “a distributional shift in supply,” NGTL has told the NEB. Demand and prices drive network traffic to seasonal peaks in the range of 15 Bcf/d. The annual capacity additions adapt the web to geographical shifts in drilling and processing, gas demand growth sources such as thermal oilsands plants, and sales opportunities via long-distance conduits to the United States and eastern Canada.

The current construction chiefly serves liquids-rich geological sweet spots tapped by horizontal drilling and hydraulic fracturing in shale deposits that straddle B.C. and Alberta.

Producers developing the Montney, Duvernay and Deep Basin formations are driving a five-year, CDN$7-billion (US$5.6-billion) NGTL capital program to fulfill 2.5 Bcf/d of delivery contracts by 2021.

Costs also include gas traffic disruptions during peak construction and maintenance periods. A big 2017 summer and early fall work program temporarily shrank NGTL flows by about 2 Bcf/d or 20%, undermining spot sales volumes and prices.

“We continue to focus on optimizing the competitiveness of the NGTL system,” TransCanada Vice President Tracy Robinson said of the expansion program.

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