TransCanada seeks pipe approval linked to Petronas LNG terminal

Mon Mar 20, 2017 6:55pm EDT
 
Email This Article |

By Ethan Lou

CALGARY, Alberta (Reuters) - Transcanada Corp (TRP.TO: Quote) has secured shippers' commitment for a pipeline associated with Malaysian state-owned oil company Petronas' pending Pacific NorthWest liquefied natural gas (LNG) terminal in western Canada and targets 2018 for construction, the company said on Monday.

Government construction approval will allow the company to start building most of the North Montney Mainline before majority owner Petroliam Nasional Bhd, or Petronas, decides whether to commit to the project, TransCanada said in a statement.

The pipeline, however, is independent of Pacific NorthWest and "should not be interpreted as changing any aspect of the decision process," spokesman Shawn Howard said in a statement.

North Montney was to provide gas to Pacific NorthWest, but it also connects to existing systems to serve a wide range of markets.

"This includes deliveries to the oil sands, local distribution companies, eastern Canada, the U.S. Midwest or to California," Howard said.

Canadian gas producers have been increasingly squeezed from the lucrative eastern market by U.S. rivals, which have lower transportation costs, and have been looking for growth in the Asian market through LNG exports.

But while the Canadian government has green-lit the C$36 billion ($27.25 billion) Pacific NorthWest project in northern British Columbia, Petronas has put off a decision on whether to proceed with it.

Asked on Monday whether Petronas has given TransCanada any assurances on commitment, Pacific NorthWest referred questions to Progress Energy Canada Ltd, a subsidiary of Petronas, which said it supports North Montney.   Continued...

FILE PHOTO --  A logo of a Petronas fuel station is seen against a darkening sky in Kuala Lumpur, Malaysia February 10, 2016.     REUTERS/Olivia Harris/File photo