TransCanada Plans British Columbia Pipeline Project

By Carolyn King

TransCanada Corp. on Wednesday said it will go ahead with the 1.9 billion Canadian dollar ($1.74 billion) Merrick Mainline pipeline project, which will transport natural gas from northeastern British Columbia toward the Pacific coast and serve as a key link in the province's emerging liquefied natural gas export market.

The Calgary, Alberta-based pipeline company said it has signed agreements with Chevron Corp. and Apache Corp. for about 1.9 billion cubic feet a day of firm natural-gas transportation services to underpin the project, which extends TransCanada's Nova Gas Transmission Ltd. system.

The proposed 161-mile Merrick pipeline would carry natural gas to the inlet of the proposed Pacific Trail Pipeline, a partnership between Chevron and Apache that would ship natural gas from Summit Lake in British Columbia to the partnership's proposed Kitimat LNG facility on the coast.

The planned investments come as energy companies eye west-coast projects to ship booming North American natural-gas production to hungry markets in Asia, where prices are higher. LNG is created by cooling natural gas to a point at which it turns into a compact liquid that can be shipped on tankers.

Canada hopes to transform its northern Pacific coast into a major LNG hub as it works to develop new markets for its energy products, which are now overwhelmingly shipped to the U.S.

TransCanada said the building of Merrick will depend on regulatory approval and a positive final investment decision for the Kitimat LNG project. It said it is conducting initial work on the Merrick project and expects to file an application with Canada's National Energy Board in the fourth quarter of 2014 for approvals to build and operate the project. If cleared, it envisions that the Merrick project would begin service in the first quarter of 2020.

The company's controversial Keystone XL pipeline, which would carry Canadian crude oil to the U.S. Gulf Coast, awaits U.S. approval.

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