TransCanada Seeks to Build, Without Petronas FID

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TransCanada announced March 20 it has applied to Canadian regulator National Energy Board for permission to build the 301-km North Montney Mainline (NMML) Project in northeast British Columbia, despite no investment decision for the LNG export projects it is due to serve. 

NMML would link into the much longer 900-km, 2bn ft³/d Prince Rupert Transmission pipeline project planned to run from the Rockies to the coast, which TransCanada has been cleared to develop but on which it has yet to take a final investment decision (FID) and start constructing.

TransCanada said March 20 it had previously been granted the required primary federal and provincial approvals to construct NMML, subject to conditions that included the requirement for a positive FID on the proposed 19.2mn mt/yr Pacific Northwest LNG (PNW) project. 

North Montney is a shale gas-rich area of northeast British Columbia where Malaysian Petronas has assets. But the PNW project that Petronas leads has yet to take FID, even though the Canadian government has green-lighted it.

Earlier this month, Shell said it had shelved Prince Rupert LNG which it inherited from BG, while the nearby LNG Canada project recently re-tendered its main EPC contract in order cut project costs. Canadian LNG developers are wary of going ahead with expensive schemes, until a current supply surplus in the global LNG market has diminished. It could take until the mid-2020s before that happens.

Map of the Prince Rupert Transmission and proposed NMMP gas pipeline projects (Map credit: TransCanada)

TransCanada said March 20 the change from its original consents now being sought from NEB is that it be allowed to move forward with construction of the majority of the estimated $1.4bn NMML pipe, before FID on the Petronas LNG project is taken. “In support of the variance for the NMML Project, TransCanada has secured new 20-year commercial contracts with 11 shippers for approximately 1.5bn ft³/d of firm service,” the company said.

Petronas results

Petronas in 2016 results a week ago on March 14 said its LNG third-party sales volume was 29.01mn metric tons last year, compared with 28.49mn mt in 2015, helped by higher volumes from Malaysian train 9 (T9) at Bintulu and from GLNG in Australia. The company delivered the first LNG cargo from T9 and successfully commissioned its Petronas floating LNG project, both in Malaysia, last year. But little was said about its Canada PNW project. It has reportedly denied that it is planning to sell its stake in it.


Mark Smedley