TransCanada eyes new pipeline to feed Kitimat LNG

TransCanada has signed agreements with Chevron and Apache for approximately 1.9 billion cubic feet per day (Bcf/d) of firm natural gas transportation services, officials announced recently.

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 TransCanada's NGTL system to the inlet of Chevron and Apache's proposed Pacific Trail pipeline (PTP) that will terminate at the Kitimat LNG terminal at Bish Cove near Kitimat, British Columbia.

The proposed project will be an extension from the existing Groundbirch Mainline section of the NGTL system beginning near Dawson Creek to its end point near the community of Summit Lake.

The $1.9 billion project will consist of approximately 260 kilometres (161 miles) of 48-inch diameter pipe.

"The Merrick Mainline project will be designed, constructed and operated utilizing TransCanada's extensive experience in developing safe and reliable energy infrastructure," said Russ Girling, TransCanada's CEO.

"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," he added.

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 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 Chevron and Apache, delivery volumes will ramp up between 2020 and 2022 to an aggregate volume of approximately 1.9 billion cubic feet/day. NGTL is also in discussions with other parties that have expressed interest in transporting natural gas on the Merrick Mainline.

The Merrick Mainline 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.