TransCanada, which recently changed its name to TC Energy, is on a mission to sell more natural gas produced in Western Canada to New England and the East Coast of Canada. TC Energy’s Mainline pipeline system, that pretty much spans the continent, has just won its third rate cut by the Canadian National Energy Board (NEB), making Western Canadian gas that much cheaper to cart over 1,000 miles away to markets in the east.
TC (then called TransCanada) cooked up a plan to expand an existing pipeline in New England and connect it to a point in Quebec to flow gas from the opposite side of the continent into New England. We can’t get a single new pipeline project approved to flow Marcellus gas a few hundred miles away into New England. Something is seriously wrong with this picture.
We won’t recount the history of TC’s plan to ship gas from Western Canada to Ontario and Quebec to compete with cheap Marcellus/Utica gas entering the country. You can read about that history here: Lowball Western Canadian Gas Can’t Compete with Marcellus/Utica.
NGI reports that the NEB has just approved a third rate cut for TC’s Mainline, which means TC will need to add extra compressor stations:
The third toll cut since 2017 will go into effect this fall on TC Energy’s cross-Canada natural gas Mainline, under a swift approval that the National Energy Board (NEB) granted to an unopposed discount package.
The new deal provides 10- to 21-year transportation contracts for 630 MMcf/d at a negotiated rate of C93 cents/gigajoule (GJ), or 73 cents/MMBtu. Traffic is to grow in stages with start dates every Nov. 1 from 2019-2021.
Delivery destinations for 17 participating shippers include Ontario, Quebec, the United States, and Canadian east coast markets via a roundabout route across U.S. connections. The traffic growth would trigger about C$250 million ($188 million) in Mainline compressor additions.*
*NGI’s Daily Gas Price Index (May 10, 2019) – NEB Grants Third Toll Cut for TC Energy’s Natural Gas Mainline
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