TransCanada to build Canada LNG pipeline
The company will build, own and operate the LNG pipeline
TransCanada has been selected by Shell Canada to build, own and operate a $4 billion pipeline to export liquefied natural gas (LNG) via the country’s west coast.
The 700-kilometre Coastal GasLink will ship 1.7bn cubic feet per day (cf/d) of natural gas produced from shales in northeastern British Columbia (BC) to Shell’s proposed Kitimat terminal.
Shell and TransCanada are also moving toward definitive long-term agreements to supply the proposed LNG Canada project, which would liquefy 2bn cf/d for export to Asia. If approved, the pipeline will come into service towards the end of the decade.
Construction is expected to take three years and create more than 2,000 jobs, TransCanada said.
It’s the latest in a series of developments that have given new urgency for LNG in Canada and renewed hope for gas producers battered by low North American prices. On 16 May, Shell, Mitsubishi, Kogas and PetroChina announced plans for a 12 million tonnes per year (t/y) facility, sourced from unconventional gas plays in BC, including the Montney.
Large Canadian shale plays like Horn River are effectively stranded without access to markets other than the US. According to the Energy Information Agency US gas imports are at the lowest in a decade, and now Canadian producers are looking to Asia as an alternative.
Though it will initially supply Shell’s Kitimat terminal, GasLink could be expanded to supply Canada’s other proposed LNG projects, which are also located at Kitimat.
To date, Canadian regulators have granted two export permits: Kitimat LNG is a partnership of Apache, Encana and EOG Resources, while the smaller BC LNG co-operative is comprised of local aboriginal communities backed by Houston-based LNG Partners.
A fourth proposal by Malaysia’s Petronas and Calgary-based Progress Energy brings the number of LNG projects officially on the books to four, although several other companies have openly mused about building their own.
If all are built, Canada could be exporting 27m t/y by the end of the decade, about 11% of projected Asia-Pacific demand of 240m t/y.