TransCanada changes direction and opens up emerging U.S. natural gas supplies to Eastern Canada.
Consumers in southern Ontario now have direct access to the enormous natural gas supply in the northeastern U.S. thanks to recent upgrades to TransCanada’s Canadian Mainline gas transmission system.
On Nov. 1, gas began flowing north into Canada through our Niagara meter station after decades of Canadian gas entering the U.S. through this facility. It is the first time gas produced in Pennsylvania and West Virginia from the emerging Marcellus Shale formation has become directly available to Canadians.
“The shale gas boom has fundamentally altered the North American natural gas market and resulted in a huge supply becoming available much closer to the high population areas of Ontario, Quebec and the northeastern United States,” says Karl Johannson, TransCanada’s president of natural gas pipelines. “We recognized this as an opportunity to repurpose some of our existing infrastructure to provide our customers with a new source of gas. This will allow for increased choice in the market, and possibly lower prices for consumers.”
Reversing the Niagara meter station was part of a $130-million upgrade to TransCanada’s Canadian Mainline system in southern Ontario that expanded the system’s capacity in and around the Greater Toronto Area. Natural gas demand is expected to grow in Ontario and Quebec in coming years as new power plants and industrial projects are launched as a result of the new and abundant gas supplies.
TransCanada has teamed up with Tennessee Gas Pipeline and National Fuel Gas Supply Corp. to bring gas produced from the Marcellus by Statoil Natural Gas, Anadarko, Mitsui and Seneca Resources to the Canadian border where it enters the Canadian Mainline system. From there, shippers, such as JP Morgan, have entered firm transportation contracts with TransCanada to import about 400,000 gigajoules per day. The company also plans to continue working with its U.S. pipeline counterparts to access additional northeast shale gas supplies.
“There are a number of competing projects to bring Marcellus gas up into Canada, but ours is the first to come into service and has the benefit of being based upon existing infrastructure,” Johannson explains. “This means it can be done at a lower cost and with less impact on the environment and on local communities when compared to new development.”
The development comes as a National Energy Board hearing on TransCanada’s plan to restructure tolls and service on the Canadian Mainline enters its last stage, with final arguments taking place in Calgary later this month. Johannson says tapping into Marcellus gas will benefit all Mainline users because it will ensure the infrastructure continues to be used as effectively as possible.
“Our restructuring plan reflects the fact that the Mainline system is increasingly being used for short-haul shipments in Eastern Canada and the U.S. and is being used less for moving gas across Canada from west to east,” Johannson says. “Accessing new gas supplies means we’ll have more gas on the system so tolls can be as low as possible for everyone.”