Canada approves C$1.3 billion western gas pipeline expansion

Mon Oct 31, 2016 12:58pm EDT
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By Nia Williams

CALGARY, Alberta (Reuters) - The Canadian government on Monday approved the C$1.3 billion ($968.78 million) expansion of a natural gas gathering pipeline in western Canada belonging to a wholly owned subsidiary of TransCanada Corp (TRP.TO: Quote), with 36 conditions attached.

The NOVA Gas Transmission Ltd (NGTL) expansion project will create up to 3,000 jobs during construction and involve building and operating new gas pipelines facilities, the Natural Resources Canada ministry said in a statement.

TransCanada said the entire project is expected to be finished by the second quarter of 2018.

Key conditions include offering jobs to individuals in the indigenous communities and developing a caribou habitat restoration plan.

Dirk Lever, an analyst with AltaCorp Capital in Calgary, said the approval was "absolutely expected" as natural gas gathering pipelines attract far less scrutiny and controversy than major crude oil export pipelines.

The NGTL System is one of the largest in North America and gathers natural gas from the fast-growing Montney and Duvernay shale plays in northern Alberta and northeastern British Columbia.

The system gathers 75 per cent of the natural gas produced in western Canada, transporting approximately 11.3 billion cubic feet a day, according to TransCanada.

The Canadian government is in the middle of reforming its regulatory process for major energy projects, and in January announced a set of interim principles to guide decisions on projects already under review, including the NGTL expansion.   Continued...

President and CEO Russ Girling of TransCanada addresses shareholders during the company's annual general meeting in Calgary, Alberta, May 1, 2015. REUTERS/Todd Korol