January 21, 2013
$5 billion pipeline moves ahead
TransCanada Corporation was awarded a $5 billion contract to build a natural gas pipeline from northeastern B.C. to an export facility near Prince Rupert.
“The proposed Prince Rupert Gas Transmission project will allow British Columbians, and all Canadians, to continue to benefit from the responsible development of the growing supply of valuable natural gas resources in the WCSB (Western Canadian Sedimentary Basin)”, said Russ Girling, TransCanada’s President and CEO.
“(We) look forward to involving the skilled workforce in B.C. and across Canada to help us develop an important new component of B.C.’s growing natural gas infrastructure.”
Progress Energy Canada Ltd. selected TransCanada on Jan. 9 to design, build, own and operate the proposed Prince Rupert Gas Transmission Project.
The project involves the construction of a 750-kilometre pipeline to deliver natural gas from the North Montney region near Fort St. John, B.C. to a Liquid Natural Gas (LNG) export facility in Port Edward near Prince Rupert.
The WCSB is a vast sedimentary basin underlying 1.4 million square kilometres of Western Canada including southwestern Manitoba, southern Saskatchewan, Alberta, northeastern B.C. and the southwest corner of the Northwest Territories.
It is estimated to have 143 trillion cubic feet (4,000 km3) of marketable gas remaining, which represents about two thirds of Canadian gas reserves.
The proposed pipeline route is based on a preliminary assessment of geography, terrain, environment, social aspects and constructability.
Before a route can be defined, TransCanada will engage with Aboriginal and local communities near the proposed route.
Progress Energy became a subsidiary of Malaysian state-owned firm Petronas on Dec. 12, 2012, when Petronas Carigali Canada Ltd. acquired Calgary-based Progress Energy Resources Corp.
On Dec. 4, 2012, Petronas Carigali Canada Ltd. and Progress Energy Resources Corp. announced that their proposed Pacific Northwest LNG export facility at Port Edward is moving into the next phase of engineering.
The Pacific Northwest LNG Project is a proposed LNG export facility, on Lelu Island within the District of Port Edward on land administered by the Port of Prince Rupert.
The project’s detailed feasibility study has been successfully completed and the project is moving into the pre front-end engineering design (Pre-FEED) phase.
The Pre-FEED phase will be undertaken to provide certainty around project scope and a further understanding of construction timelines, costs and labour force requirements.
“We are excited to have completed the detailed feasibility study phase and are now moving into the next phase of our engineering work, which will include the submission of our project description to Canadian regulators in early 2013,” said Michael Culbert, president and CEO of Progress Energy.
“In addition, we are pleased to have officially named our project Pacific Northwest LNG and will continue to move the project forward at an aggressive pace.”
The project will include two trains, or liquefaction plants, when initially constructed, as well as an export terminal and jetty to accommodate ocean-going LNG carriers.
The LNG throughput is currently designed for about 3.8 million tonnes per annum per train based on the LNG Export Joint Venture that was announced between the two companies in 2011.
However, the acquisition of Progress Energy by Petronas is expected to increase the throughput of natural gas at the export facility by about 60 per cent to six million tonnes per annum.
The total capital investment for the export facility is estimated between $9 billion and $11 billion and the project will create about 3,500 construction jobs.
Progress Energy and TransCanada expect to finalize definitive agreements in early 2013, subject to approvals by their respective boards.
TransCanada will immediately begin public consultation and prepare the relevant regulatory filings for the project under BC jurisdiction.
In addition, TransCanada proposes to extend its existing NOVA Gas Transmission Ltd. (NGTL) system in northeast B.C. to connect both to the Prince Rupert gas pipeline and to additional North Montney gas supply from Progress Energy and other parties.
This new infrastructure will allow the Pacific Northwest LNG export facility to access both North Montney supplies as well as other WCSB gas supply through the NOVA Inventory Transfer trading hub and the extensive existing NGTL pipeline network.
Initial capital cost estimates associated with extensions of the NGTL system are about $1 billion to 1.5 billion, with completion scheduled for the end of 2015.
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