TransCanada Corp. has been selected by Shell Canada Ltd. to build and operate the proposed Coastal GasLink project, a large-diameter pipeline that initially would carry more than 1.7 Bcf/d from the gassy Montney, Horn River and Cordova basins in the Dawson Creek, British Columbia (BC) area about 700 kilometers (435 miles) to Shell’s planned 12 million ton/year liquefied natural gas (LNG) export facility near Kitimat, BC.

LNG Canada, which was announced last month by Shell to carry gas to Asia Pacific markets, is the largest North American gas export project to date (see Daily GPI, May 16). Shell would own 40% of the project; it is partnering with 20% stakeholders Korea Gas Corp., Mitsubishi Corp. and PetroChina Co. Ltd.

“Our team has the expertise to design, build and safely operate pipeline systems,” said TransCanada CEO Russ Girling. Company officials now plan to have “open and meaningful discussions with Aboriginal communities and key stakeholder groups, including local residents, elected officials and the government of British Columbia, where we will listen to feedback, build on the positive and seek to address any potential concerns.”

Shell and TransCanada now are working on definitive agreements for Coastal GasLink, which would cost an estimated US$4 billion. Service could begin toward the end of the decade if everything goes to plan.

“Coastal GasLink will add value to British Columbians, particularly Aboriginals and communities along the conceptual route, by creating real jobs, making direct investments in communities during construction and providing economic value for years to come,” said Girling. The project could provide 2,000-2,500 direct construction jobs over a two- to three-year construction period, according to TransCanada.

Besides transporting BC gas to the West Coast, Coastal GasLink would offer options for shippers to access gas supplies through an interconnection with the Nova Gas Transmission Ltd. (NGTL) system and Nova inventory transfer, or NIT, which is the western trading hub, said TransCanada.

“A proposed contractual extension of TransCanada’s NGTL System using capacity on the Coastal GasLink pipeline, to a point near the community of Vanderhoof, BC, will allow NGTL to offer delivery service to its shippers interested in gas transmission service to interconnecting natural gas pipelines serving the West Coast,” TransCanada said. “NGTL expects to elicit interest in and commitments for such service through an open season process in late 2012.”

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