CALGARY, Alberta (Reuters) - Shippers have taken up Transcanada Corp’s (TRP.TO) new flat-toll offer to move natural gas on its Mainline pipe from western to central Canada, the company said on Monday.
TransCanada’s new offer for 1.5 petajoules of capacity per day on its Mainline system from western plays to southern Ontario came three months after shippers balked at the previous varied toll structure, which they saw as too high.
In Ontario, Canadian shippers face competition from eastern U.S. shale basins like the Marcellus and Utica. They have comparable production costs to Canada’s remote Montney and Duvernay gas plays in the west, but lower delivery costs.
TransCanada’s new rate is 77 Canadian cents per gigajoule for a 10-year term, instead of the previously offered range of between 75 and 82 Canadian cents.
TransCanada said the term of contract is 10 years, with a targeted in-service date of Nov. 1. The company intends to file an application for regulatory approval with the National Energy Board regulator in April, it said.
Reporting by Ethan Lou in Calgary, Alberta; Editing by Bernadette Baum