TransCanada Seeks Pipe Approval Linked To Petronas LNG Terminal
CALGARY, Alberta, March 20 (Reuters) - Transcanada Corp has secured shippers' commitment for a pipeline associated with Malaysian state-owned oil company Petronas' pending Pacific NorthWest liquefied natural gas terminal in western Canada and will seek early construction, the company said on Monday.
Government construction approval will allow the company to start building most of the North Montney Mainline before Petroliam Nasional Bhd, or Petronas, decides whether to commit to the project, TransCanada said in a statement.
Asked on Monday whether Petronas has given any assurances on commitment, TransCanada said North Montney is independent of Pacific NorthWest and "should not be interpreted as changing any aspect of the decision process."
North Montney was to connect producers to TransCanada's proposed Prince Rupert Gas Transmission Project to provide gas to Pacific NorthWest, as well as to existing systems for the western market, according to the company.
While the Canadian government has green-lit the C$36 billion ($27.25 billion) LNG project in northern British Columbia, majority-owner Petronas has put off a decision on whether to proceed with it.
Petronas and Pacific NorthWest did not immediately respond to requests on Monday for comment.
Canada's approval for the project came last year after a three-year wait. Analysts have been skeptical about its prospects, given current low gas prices and cost-cutting at the Malaysian oil giant.
The project has also faced opposition from environmental and aboriginal groups, some of which have sued.
Late last year, media reports said Petronas had identified a new location for the plant to cut costs and address environmental concerns. But the company has been mum about its intentions, saying only that it will study market conditions before determining its next steps.
In TransCanada's statement, it said construction will cost about C$1.4 billion ($1.05 billion), and it has secured 20-year contracts with 11 shippers for approximately 1.5 million gigajoules per day of gas.
"TransCanada plans to begin construction in the first half of 2018, with facilities being phased into service over a two-year period, beginning in April 2019," the company said.
TransCanada was previously granted government approval for North Montney on condition of a positive final investment decision.
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.
Privately held Black Swan Energy Ltd confirmed it will be a shipper.
($1 = 1.3356 Canadian dollars)
(Reporting by Ethan Lou; Editing by Dan Grebler)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea