TransCanada Corp. said this week that it has reached an agreement with shippers on reduced tolls for its Canadian Mainline, which runs from Empress, AB, to Dawn ON, and has filed the application with the National Energy Board (NEB) for approval. The new tolls would become effective Jan. 1.

The interim toll application reflects the proposals and resulting tolls put forward by TransCanada to both Mainline and Alberta System stakeholders, which are supported by the Canadian Association of Petroleum Producers (CAPP) and a number of other stakeholders, TransCanada said (see Daily GPI, Nov. 15).

"We are pleased with the progress we have made in our discussions with stakeholders and believe the proposed tolls will provide significant benefits," said CEO Russ Girling. "The Mainline continues to be a critical piece of infrastructure that has linked natural gas supplies to North American markets for over 50 years and will continue to do so for years to come."

While the company has seen reduced volumes on its Mainline, TransCanada expects to take advantage of Western Canada shale production once it ramps up.

"TRP [TransCanada] expects Mainline volumes to stabilize and begin rising 100-200 MMcf/d per year, ultimately plateauing at 4 Bcf/d as additional shale gas volumes offset conventional declines," UBS Investment Research analyst Chad Friess said in a research note. "TRP has firm commitments to bring 2 Bcf/d of incremental shale volumes to market by 2013 with interest for 2 Bcf/d more. As the swing pipeline, most of the incremental volumes are likely to reach the Mainline."

Girling said it is important for a dialogue to continue with shippers and other stakeholders to garner additional support for TransCanada's proposals and to develop a long-term plan to achieve competitive tolls.

The proposed toll for long-haul service from Empress to Dawn is C$1.23/gigajoule (GJ), a decrease from the 2010 toll. All proposed Mainline tolls are lower than or equal to what they would otherwise be under a previously approved 2007-2011 settlement. For example, the 2011 toll from Empress to Dawn would be C$2.45/GJ under the current settlement.

The proposed tolls are achieved, in part, through:

TransCanada said it intends to file an application in early 2011 for approval of final tolls.

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