TransCanada solves trouble spot

TransCanada has cleared a troublesome speed bump on the road to obtaining approval for its Energy East crude pipeline to Eastern and Atlantic Canada.

The Calgary-based company said it has signed an agreement in principle that assures three of Canada’s largest natural gas distributors they will have sufficient gas deliveries and reduced transmission costs should one of TransCanada’s six gas lines be converted to carry 1.1 million barrels per day of crude for Energy East.

The three local distribution companies are Union Gas and Enbridge Gas Distribution in Ontario and Gaz Metro in Quebec.

TransCanada said it will design Eastern Mainline gas project to meet all firm requirements including gas transmission contracts resulting in both 2016 and 2017 new capacity open seasons plus about 50 million cubic feet per day of additional capacity.

The company also said it will ensure a long-term benefit to gas consumers in Ontario and Quebec will reduce rates by at least C$100 million through to 2050.

The local distribution companies say their concerns have been resolved and that the cost of converting an existing segment of the gross-Canada natural gas pipe for the C$12 billion Energy East will not be carried by their customers.

TransCanada Chief Executive Officer Russ Girling said in a statement Aug. 24 the local distribution companies’ concerns have been addressed “in a way that best met our collective objectives.”

The Energy East plans include the conversion of 1,900 miles of one TransCanada gas pipeline that is not fully contracted on a firm basis to oil service.

- GARY PARK