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TransCanada discloses role in gas pipeline talks CEO gives ‘highest priority’ to Arctic project, but wants equity stake Gary Park Petroleum News Calgary Correspondent
TransCanada PipeLines has confirmed what the rest of the world took for granted — that it is engaged in talks with the Aboriginal Pipeline Group and the Mackenzie Delta gas owners with the intent of gaining an equity stake in the proposed Mackenzie Valley pipeline.
Hal Kvisle, chief executive officer of Canada’s largest gas shipper, said April 25 that his company’s “highest priority” is to help the aboriginals and pipelines “bring that project forward.”
Breaking months of silence, he said TransCanada has been involved in “fruitful discussions” with both sides about the construction of a pipeline.
“We’ve made a number of proposals to them and a number of suggestions and recommendations ... and we will continue to talk to them and help out in any way we can,” Kvisle said.
“We are more optimistic at this point than any time in the past many years that the project is going to go ahead fairly soon.”
Citing confidentiality agreements, Kvisle declined to offer further details. Government also confident But his confidence was echoed April 25 by federal Indian Affairs and Northern Development Minister Robert Nault who said a final deal covering financial backing for the Aboriginal Pipeline Group is “within days” of an announcement.
The Aboriginal Pipeline Group and the Mackenzie Delta Producers Group are “into the final details of this agreement,” while government and regulatory agencies are “lined up and ready to roll” once a preliminary information package is filed by the producers.
Kvisle said the regulatory phase of the project could take three years to complete, but once approvals were received the pipeline could be built within two years.
He did concede “it is not clear at this time” whether TransCanada will play a major role in gas development north of the 60th parallel, which is key to accessing gas volumes to take up spare capacity in TransCanada’s massive pipeline network to Eastern Canada and the United States.
In recent hearings before the National Energy Board, TransCanada has warned that its mainline system could be running at 50 percent of its current capacity of 7.3 billion cubic feet per day as early as 2009, or as late as 2027, as supplies from the Western Canada Sedimentary Basin go into decline.
Gas from the Delta and Mackenzie Valley could boost available volumes by as much as 1.9 billion cubic feet per day, although that alone would not be sufficient to persuade TransCanada to playa major part in building the pipeline, Kvisle said. Company wants ownership position He made it clear that TransCanada wants an ownership position in pipelines from the Delta or Alaska’s North Slope, adding that his company “would not want to put significant technical expertise or operating expertise or effort into making these projects go ahead unless we have an equity interest.”
TransCanada has a foot in both camps, as joint owner along with Duke Energy in Foothills Pipe Lines, which has the exclusive right to construct and operate the Canadian portion of the Alaska Highway Pipeline Project.
To further position itself for Arctic projects, TransCanada gained shareholder approval April 25 to establish a holding company known as TransCanada Corp., opening the way for the creation of a subsidiary that could participate in a northern pipeline.
Under the new corporate structure, TransCanada will be able to circumvent restrictive clauses in some of its debt securities that block certain types of investments, such as joint ventures it doesn’t own outright, including a non-controlled joint venture such as a Mackenzie Valley pipeline.
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