Karl Johannson: Executive vice-president and president, natural gas pipelines
In anticipation of TransCanada’s upcoming Annual Meeting on May 1, members of TransCanada’s executive leadership team share their thoughts on significant milestones from the past year and the company’s priorities for 2015.
Natural gas pipelines are and continue to be TransCanada’s largest business. We safely deliver 20 per cent of the natural gas consumed in North America each day through a network of 68,000 kilometres (42,100 miles) of natural gas pipelines.
Over the past number of years there have been significant shifts in North America’s natural gas markets that have presented both opportunities and challenges for our company.
TransCanada has responded to these opportunities through transformational changes we’ve made to our asset base in response to changing supply and demand patterns. This will ensure that our existing pipelines prosper over the long haul. We’ve also secured significant growth opportunities to connect the abundant natural gas supplies to new and existing markets both domestically and abroad.
Looking back at 2014, our company realized some significant milestones that will position TransCanada for success in both the short and long-term.
The restructuring of the Canadian Mainline’s tolling framework has resulted in greater stability and competitiveness for the Mainline system through a settlement reached with three major local distribution companies in Ontario and Québec that the NEB approved in late 2014. This will enhance the Mainline’s markets access to northeastern U.S. natural gas production and also provides long-term stability for the Mainline system for the next 15 years.
Our ANR Pipeline in the U.S. was enhanced through long-term commitments to move almost two billion cubic feet per day of natural gas from the Marcellus and Utica regions to key markets for an average term of 23 years. This included support for a program to reverse the flow on ANR’s Southeast Mainline to enable more natural gas deliveries to the Gulf Coast. This successful recontracting will be used to its full potential and provides a solid base for future expansions to key North American markets.
We also placed $900 million of new facilities into service on our NGTL System and in Mexico, the two regions that make up the bulk of our short-tern growth plans for natural gas pipelines. NGTL saw $300 million in new assets begin operation, and we’re expecting an additional $4.8 billion of new investment on the system by the end of 2017. This system continues to be the primary gathering system for Alberta and northeastern British Columbia, moving growing production from the Duvernay, Montney and Horn River plays.
In November of last year, we also brought the Tamazunchale Pipeline into service. The US $600-million extension was a true testament of our ability to engineer and manage projects over extremely rugged terrain. Looking to the future, the Topolobampo and Mazatlan projects will double our Mexican asset base to US $2.6 billion by 2016.
TransCanada is focused on helping British Columbia develop a West Coast LNG export industry. We have successfully reached agreements with several First Nations in northern B.C and we will continue to build upon these relationships and discussions with those living along our proposed pipeline routes to ensure they realize long-term benefits from the historic opportunity that LNG development represents. Our Prince Rupert Gas Transmission and Coastal GasLink projects are already underpinned by leading international energy companies that have yet to make a final investment decision on their respective developments. We are anticipating both projects to be operational by the end of the decade.
We’re very excited to realize the opportunities that lie ahead for TransCanada’s natural gas business in both the short and long-term. We’ve built a solid base of assets and will continue to seek opportunities to develop future assets where we have a competitive advantage and realize our vision of becoming North America’s leading energy infrastructure company.
Karl Johannson, executive vice-president and president, natural gas pipelines