TransCanada's (TSX:TRP,NYSE:TRP) announcement that it has been chosen to build a $5-billion pipeline that will connect expanding volumes of British Columbian shale gas to Canada's West Coast has once again given investors a reason to be optimistic.
Many feel the announcement is good news not only for the company, but also for the entire natural gas sector. That's because the new pipeline may finally allow the region to compete with established liquefied natural gas (LNG) export areas such as Australia and the Middle East; it will also help domestic producers take advantage of strong gas prices in Asian markets instead of being restricted to the currently depressed levels being recorded in North America. “Pretty darn exciting” "I think what we've determined in North America is that we have more resources than we're going to need for our own consumption and the focus therefore has turned to export markets," said TransCanada CEO Russ Girling in an interview with CTV. "Western Canada has one of the largest and best deposits of shale gas in North America and it has a great opportunity to capture a significant share of the growth in the global LNG market by putting these kinds of projects together." The trend, he said, is "pretty darn exciting" for BC and Canada. The proposed pipeline is set to transport natural gas primarily from the North Montney gas-producing region near Fort St. John, BC to the recently announced Pacific Northwest LNG export facility in Port Edward near Prince Rupert, BC, according to a TransCanada press release. When completed, the Prince Rupert Gas Transmission project will deliver 2 billion cubic feet (Bcf) of gas per day; this capacity is expandable to up to 3.6 Bcf of gas per day. Pipeline construction is expected to last three years, and taking into account the time needed to gain necessary environmental approvals, TransCanada estimates the project will be up and running in late 2018.