​LNG or not, $1.4B North Montney Mainline is ready to go ahead: TransCanada

Image: TransCanada

TransCanada says it doesn’t need to wait until there is a positive final investment decision on the Pacific NorthWest (PNW) LNG project to go ahead with new natural gas offtake capacity from the bustling Montney play.

The company has filed a variance application with the National Energy Board to proceed with construction of the majority of the North Montney Mainline, which the regulator previously approved subject to conditions that included a corporate go-ahead from Petronas subsidiary Progress Energy and its partners for the LNG facility.

The pipeline filing doesn’t say anything about the PNW project’s prospects, TransCanada says.

The variance seeks approval to build a “pre-LNG pipeline and facilities,” made up of about 200 kilometres of pipeline.

Subject to the approval of the variance, TransCanada plans to begin construction in the first half of 2018, with facilities being phased into service over a two-year period beginning in April 2019.

“The cost to construct this pre-LNG pipeline and facilities is C$1.4 billion. This 42-inch pipeline will deliver approximately 1.5 billion cubic feet of natural gas per day for 11 shippers that have signed 20-year commercial contracts,” TransCanada spokesman Shawn Howard told JWN via email.

The gas flowed on the North Montney Mainline will be an integrated part of TransCanada’s NGTL system, which is currently undergoing a major expansion.

To be clear, despite the project being a “pre-LNG pipeline,” the gas on the line will not necessarily need to go to LNG facilities, Howard said.

It will feed into the NGTL system, which will provide producers various options including deliveries to the oilsands, local distributors, Eastern Canada, the U.S. Midwest or to California/Pacific Northwest.

“[The variance application] should not be interpreted as changing any aspect of the decision process undertaken by Progress, Petronas and their partners surrounding their PNW LNG project or TransCanada’s decision to proceed with the proposed PRGT [Prince Rupert Gas Transmission] project,” Howard said.

TransCanada was selected by Progress to design, build, own and operate the proposed PRGT project. It consists of approximately 900 kilometres of pipeline from the District of Hudson's Hope to the proposed PNW LNG facility on the west coast of B.C.

To complicate this tap dance of pipeline and LNG facility proposals and approvals, PNW LNG already announced a positive final investment decision in June 2015 subject to two conditions, both of which have been met.

The first was satisfied on July 21, 2015 after project development agreement legislation was passed by B.C.’s Legislative Assembly. The second condition was a positive regulatory decision on the project’s environmental assessment, which was secured from the Government of Canada in September 2016.

Despite these approvals, PNW LNG is now conducting a total review of its proposed LNG facility prior to approaching the project’s shareholders for final go-ahead.

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