TransCanada Receives C$3.85 Billion Pipeline Construction Contract

August 2012, Vol. 239 No. 8

TransCanada Corp. has received a contract from Shell Canada Ltd. to build and operate a pipeline expected to cost C$3.85 billion that will transport natural gas to a planned LNG export facility near Kitimat, BC.

In May, Shell Canada parent Royal Dutch Shell PLC, Mitsubishi Corp., Korea Gas Corp. and PetroChina Co. formed a joint venture – led by Shell – to pipe gas to Canada’s Pacific Coast, where the gas would be deep-chilled and shipped to Asia.

TransCanada said its pipeline, the proposed Coastal GasLink project, will transport natural gas from the Montney gas-producing region near Dawson Creek, BC to the LNG Canada facility.

The proposed pipeline will have initial capacity of about 1.7 Bcf/d. TransCanada plans to file a project description with the BC Environmental Assessment Office this fall and file the Environmental Assessment Application in early 2014.

Pending all required regulatory and project approvals, construction of the pipeline is expected to begin in mid 2015 with pipeline operations beginning in time to meet the in-service requirements of the proposed LNG facility.

Royal Dutch Shell Chief Executive Peter Voser estimated the cost of the first phase of the LNG Canada facility at about C$12 billion.