Oil Sands Truth: Shut Down the Tar Sands

Application for North-Central corridor to bring Mackenzie Valley gas directly to the tar sands

TransCanada seeks permit for $983M gas pipeline
November 21, 2007

CALGARY – A TransCanada Corp. (TSX: TRP) subsidiary is seeking permission to build a 300-kilometre natural gas pipeline in Alberta at an estimated cost of $983 million.

The North Central Corridor pipeline is designed to carry gas to ``growing intra-Alberta markets resulting largely from increased oilsands development," the company stated Wednesday.

TransCanada said Nova Gas Transmission's application to the Alberta Energy and Utilities Board comes after 11 years of consideration of the line.

"Regardless of gas price, locations of supply and demand shift around on the system and we have to add capacity to ensure that we meet the market needs," spokeswoman Shela Shapiro said in an interview.

Natural gas is a key power source for oilsands developments. It is used as fuel to heat the steam that liquefies tar-like bitumen in steam-assisted gravity drainage projects. It's also a source of heat and hydrogen in mining and in upgrading bitumen into synthetic crude oil.

A National Energy Board report last year predicted the volume of gas consumed in oilsands production will triple by 2015 to 2.1 billion cubic feet per day.

TransCanada's proposed pipeline would connect gas-producing areas in the northwestern Alberta system at the Meikle River compressor station to the northeast portion at Woodenhouse. In addition, 26 megawatts of compression capacity would be added at Meikle River.

Subject to regulatory approval, construction is to begin in late 2008 and the first segment of the pipeline is to be completed in April 2009. The second segment is expected to be in service in April 2010.

The corridor "is the most cost-effective facility to accommodate evolving gas supply and market dynamics both within and outside Alberta," said CEO Hal Kvisle.

The company said it will build the line along existing corridors as much as possible to minimize environmental impacts.

"TransCanada consulted extensively with landowners, First Nations communities and other interested stakeholders located in the area regarding the pipeline route and has received no objections from these groups," it stated.

"TransCanada also conducted extensive consultation with customers."

The project is "a positive for TransCanada in terms of providing a source of organic, relatively low-risk growth and bodes well for their ability to source new growth projects in the future," Desjardins Securities analyst David Shteyn said in an interview.

While upstream natural gas producers "live and die by commodity prices," TransCanada is "actually immune from both commodity price risks and volume risks," Shteyn said.

Under Alberta's regulatory framework, companies that build energy infrastructure, like TransCanada, are guaranteed returns on capital invested in projects.

"Every new opportunity to deploy capital under the terms of TransCanada's regulatory framework implies increased earnings power when the asset is commissioned," Shteyn said.

TransCanada's network of pipelines extends more than 59,000 kilometres, tapping into virtually all major gas supply basins in North America.

TransCanada shares were off two cents at $38.88 Wednesday afternoon on the Toronto stock market.


Oilsandstruth.org is not associated with any other web site or organization. Please contact us regarding the use of any materials on this site.

Tar Sands Photo Albums by Project

Discussion Points on a Moratorium

User login


Syndicate content