TransCanada is seeking federal approval to move ahead with a pipeline that would service the planned Pacific Northwest LNG export project in British Columbia.
On March 20, the Calgary-based company said it had filed a variance application with Canada’s National Energy Board to begin building the majority of the North Montney Mainline pipeline before the consortium behind Pacific Northwest LNG, led by Petronas of Malaysia, makes a final investment decision (FID) on that project.
Previously, TransCanada had won federal and provincial approval to move forward with Montney only after a positive investment decision on the high-profile, US$27 billion Pacific Northwest LNG, which is currently stalled amid an internal review.
To support the variance application, TransCanada said it had lined up new 20-year commercial contracts with 11 shippers. In a statement, the company stressed that North Montney Mainline would service the existing NGTL System, not just Pacific Northwest LNG. It aims to begin construction in early 2018 and estimates the price tag at roughly US$1.4 billion.
“This project adds significant pipeline capacity that connects new gas supplies from the prolific Montney Basin to the NGTL System and will provide access to markets across North America,” TransCanada executive Karl Johannson said.
“The North Montney Mainline project will provide new jobs and economic benefits for governments and communities, while supporting further upstream resource investment in BC.”
Separately, a TransCanada spokesman said that North Montney Mainline would not change the decision-making process on Pacific Northwest LNG. The Pacific Northwest consortium did not comment publicly this week on the status of its investment decision.
Pacific Northwest LNG is the front-runner of the 20 LNG projects proposed for BC. But it has been stalled amid a global LNG supply glut that has undercut prices and thus undermined the economics of costly LNG export ventures.
Late last year, the Pacific Northwest LNG consortium said it had begun considering cheaper options for building the facility in what one executive called “a total project review”.