TransCanada reaches agreement to ship natural gas from Alberta to Ontario, northeast B.C. to also benefit

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CALGARY, AB – TransCanada announced on Monday that they have come to a successful conclusion of a long-term, fixed-price Open Season to transport natural gas from Alberta to Ontario.

The gas will travel from the Canadian Mainline at the Empress receipt point in Alberta to the Dawn hub in Southern Ontario.

“Today, WCSB producers are facing a much more challenging landscape than they have in the past. This new offering helps our customers compete more effectively by utilizing existing capacity on the Canadian Mainline, and demonstrates the importance and value of this system to deliver their products to markets in Eastern Canada and the Northeast U.S.

This long-term agreement provides significant benefits for our customers, shareholders, communities and governments that depend on the economic benefits that are generated by natural gas exploration, production and transportation. In addition to utilizing existing capacity and pipelines already in operation, the incremental revenue generated from this offering will make the Canadian Mainline more competitive.” – Russ Girling, president and chief executive officer, TransCanada

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Below are the key results from the open season:

  • Collectively, customers have signed long-term binding contracts to transport 1.5 PJ/d of natural gas from the Empress receipt point in Alberta to the Dawn hub in southern Ontario, at a single toll of $0.77/GJ.
  • The term of the contract is 10 years and has early termination rights that can be exercised following the initial five years of service (upon payment of an increased toll for the final two years of the contract).
  • The service can be provided entirely with existing facilities.
  • The targeted in-service date is November 1, 2017. The company intends to file an application for regulatory approval with the National Energy Board in April 2017.

Minister of Natural Gas Development in B.C., Rich Coleman, welcomed the news for British Columbia.

“British Columbia welcomes today’s news that TransCanada has announced a positive conclusion to its most recent open season to transport natural gas east on the Canadian Mainline to Southern Ontario.

This development will create approximately 6,000 jobs in Western Canada. This will allow many British Columbians to support their families and will provide the province with millions of dollars in revenue for services like health care and education. This long-term access for natural gas will also mean millions of dollars of investment in northeast British Columbia.

British Columbia’s natural gas is an environmentally responsible choice for Canadian consumers, utilities and businesses and it means Canadians will be supplying Canadians with their natural gas supply.”

Coleman goes on to say that this will benefit B.C. and he is happy to see that a deal was reached.

“It was nice to see the see the level of cooperation between gas producers and TransCanada to establish a competitive toll structure that will ensure B.C. natural gas can be delivered to Eastern Canada at a competitive cost.

Today truly marks a significant step in the long-term supply of clean B.C. natural gas to the Canadian marketplace.”

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