Transcanada Secures Shipper Commitments For Horn River Pipeline Project
Feb. 26, 2009
TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) today announced the successful completion of a binding open season, securing support for firm transportation contracts of 378 million cubic feet per day to connect new shale gas supply in the Horn River basin north of Fort Nelson B.C. to the Alberta System.
"The positive commercial response is a result of the tremendous, largely untapped source for unconventional natural gas in the northeastern B.C. shale basins, combined with TransCanada's ability to meet this demand economically and efficiently," said Hal Kvisle, TransCanada president and chief executive officer. "Looking forward, we expect to add future capacity to the line as the right opportunities present themselves."
The Horn River pipeline project is approximately 155 kilometres (km) and is expected to use new pipelines up to 36-inch diameter and an existing pipeline in the area to transport sweet natural gas from the Horn River area to a tie in point on TransCanada's existing Alberta System. The pipeline is expected to be operational early in the second quarter of 2011, subject to regulatory approvals. The proposed project is expected to cost approximately $340 million.
TransCanada is also encouraged by strong commercial support it has received for the developing shale gas reserves in the Montney formation of northeast B.C. as it has recently concluded a successful binding open season for gas transmission service from the Groundbirch area located west of Dawson Creek. Shippers have committed to firm gas transportation contracts that will reach 1.1 billion cubic feet per day by 2014. The proposed Groundbirch pipeline will be approximately 78 km in length and is expected to commence service in fourth quarter 2010, subject to regulatory approvals. The project is expected to cost approximately $250 million.
TransCanada expects to seek regulatory approval to build both the Horn River and Groundbirch projects as integrated extensions of the Alberta System. The company's proposal is subject to the outcome of its existing application to the National Energy Board (NEB) to have the Alberta System federally regulated. The NEB recently announced it will issue its decision on that application on February 26, 2009.
"The positive commercial response is a result of the tremendous, largely untapped source for unconventional natural gas in the northeastern B.C. shale basins, combined with TransCanada's ability to meet this demand economically and efficiently," said Hal Kvisle, TransCanada president and chief executive officer. "Looking forward, we expect to add future capacity to the line as the right opportunities present themselves."
The Horn River pipeline project is approximately 155 kilometres (km) and is expected to use new pipelines up to 36-inch diameter and an existing pipeline in the area to transport sweet natural gas from the Horn River area to a tie in point on TransCanada's existing Alberta System. The pipeline is expected to be operational early in the second quarter of 2011, subject to regulatory approvals. The proposed project is expected to cost approximately $340 million.
TransCanada is also encouraged by strong commercial support it has received for the developing shale gas reserves in the Montney formation of northeast B.C. as it has recently concluded a successful binding open season for gas transmission service from the Groundbirch area located west of Dawson Creek. Shippers have committed to firm gas transportation contracts that will reach 1.1 billion cubic feet per day by 2014. The proposed Groundbirch pipeline will be approximately 78 km in length and is expected to commence service in fourth quarter 2010, subject to regulatory approvals. The project is expected to cost approximately $250 million.
TransCanada expects to seek regulatory approval to build both the Horn River and Groundbirch projects as integrated extensions of the Alberta System. The company's proposal is subject to the outcome of its existing application to the National Energy Board (NEB) to have the Alberta System federally regulated. The NEB recently announced it will issue its decision on that application on February 26, 2009.
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