TransCanada Corporation announced that its wholly-owned subsidiary, NOVA Gas Transmission Ltd. (NGTL), has signed agreements with Chevron Canada Limited (CVX) and an Apache Canada Ltd. wholly-owned and controlled partnership (APA) for approximately 1.9 billion cubic feet per day (Bcf/d) of firm natural gas transportation services to underpin the development of a major extension of TransCanada's NGTL System.
The proposed Merrick Mainline Pipeline Project will be a significant new link in British Columbia's emerging liquefied natural gas (LNG) export market. The pipeline will transport natural gas sourced through the NGTL System to the inlet of CVX/APA's proposed Pacific Trail Pipeline (PTP) that will terminate at the Kitimat LNG Terminal at Bish Cove near Kitimat, B.C. The proposed project will be an extension from the existing Groundbirch Mainline section of the NGTL System beginning near Dawson Creek, B.C. to its end point near the community of Summit Lake, B.C. The $1.9 billion project will consist of approximately 260 kilometres (161 miles) of 48-inch diameter pipe.
"The Merrick Mainline Pipeline Project will be designed, constructed and operated utilizing TransCanada's extensive experience in developing safe and reliable energy infrastructure," said Russ Girling, TransCanada's president and chief executive officer. "We now have four major natural gas pipeline projects under development in the region totalling $12.6 billion in investment, and we are committed to ensuring they are all built responsibly and with minimal environmental impact."
TransCanada is continuing to advance its development work on the project, including field studies, engineering and design work, and pipeline routing, to support applications for regulatory approvals and finalize project requirements. Aboriginal, landowner and community engagement and consultation activities for the Merrick Mainline Pipeline Project have started and will be ongoing through the life of the project. Construction of the Merrick Mainline is dependent on regulatory approval and a positive Final Investment Decision (FID) for the Kitimat LNG project.
"The initial work for the project is proceeding well, and we anticipate filing an application with the National Energy Board in the fourth quarter of 2014 for approvals to build and operate the project," Girling said. "Subject to the necessary approvals, we expect the Merrick Mainline to begin service in the first quarter of 2020."
Under the commercial arrangements with CVX/APA, delivery volumes will ramp up between 2020 and 2022 to an aggregate volume of approximately 1.9 Bcf/d. NGTL is also in discussions with other parties that have expressed interest in transporting natural gas on the Merrick Mainline.
The Merrick Mainline Pipeline Project is a key component of TransCanada's capital growth plan, which includes $38 billion in commercially secured projects expected to be completed by the end of the decade. These projects are supported by strong market fundamentals and underpinned by long-term contracts or the revenue stability of cost-of-service regulation.