UPDATE 1-TransCanada set to start building B.C. gas pipeline this year

Fri Jun 12, 2015 1:39pm EDT
 
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(Recasts with construction start date; adds CEO quote, background)

By Julie Gordon

VANCOUVER, June 12 (Reuters) - TransCanada Corp said on Friday it expects to start construction this year on natural gas pipeline to British Columbia's Pacific Coast worth at least C$5 billion ($4.1 billion) following a conditional go-ahead by a Petronas-led consortium for what could be Canada's first LNG export terminal.

The Prince Rupert Gas Transmission line will connect the prolific Montney gas field near Fort St. John in northeastern British Columbia to the Pacific NorthWest LNG terminal, which is planned for Lelu Island on the North Pacific Coast near the port of Prince Rupert.

The conditional go-ahead for the liquefied natural gas terminal is a rare win for TransCanada, which has struggled in recent years to rally support for its crude oil pipeline projects, including the long-delayed Keystone XL line to move oil from Alberta to the U.S. Gulf Coast.

The Calgary-based pipeline company has bet big on Canada's nascent LNG industry, with deals to build more than C$13 billion in natural gas pipelines to serve proposed export projects on the country's West Coast.

"This development is a significant step forward," Chief Executive Russ Girling said in a statement. "The conditional positive final investment decision advances a key component of TransCanada's C$46 billion capital growth plan."

A consortium led by state-owned Malaysian energy company Petroliam Nasional Bhd, better known as Petronas, said on Thursday it will move ahead with its Pacific NorthWest LNG project on condition that it is approved by Canada's environmental regulator.

If final permits are issued, the project could be Canada's first LNG export terminal. An environmental review of the $11 billion plan has been temporarily halted while the regulator awaits more information from the company.   Continued...