New service making Western Canadian natural gas to Ontario, U.S. more competitive

TransCanada Mainline pipeline service

By 2020 TransCanada expects an additional delivery of 1 billion cubic feet of natural gas per day to key markets

TransCanada Corporation announced its Canadian Mainline will began shipping additional Western Canada Sedimentary Basin natural gas to markets in Eastern Canada and the U.S. as part of its Long-Term Fixed Price (LTFP) service, according to a press release.

The U.S. drilling boom in the Eastern Utica and Marcellus shale basins have flooded the eastern market with natural gas. This has made it more difficult for Western Canada to compete in the market because of higher transportation costs. TransCanada is aiming to fix that.

TransCanada’s 23 LTFP customers will have lower transportation tolls by taking advantage of existing Canadian pipeline infrastructure so they can maintain their competitive edge at Ontario’s Dawn Hub. The revenue generated will help reduce the costs needed to operate the Canadian Mainline for shippers.

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“The LTFP service is one solution that will help western Canadian natural gas producers better compete in the North American gas market. Our customers will get more of their gas to key markets at a lower cost, benefiting those companies as well as consumers, governments, communities and stakeholders,” said Tracy Robinson, TransCanada’s senior vice president, Canada Gas.

With the growth of natural gas production in the Western Canada Sedimentary Basin, TransCanada is working closely with their partners to continue to expand pipeline capacity to get their natural gas to market.

They say that by helping their customers secure natural gas markets will also support capital investment and further spending, including hiring in the oil and gas industry.

In addition to the LTFP deal, by 2020 they expect to facilitate the additional delivery of approximately one billion cubic feet of natural gas per day to key markets.

“As a transportation company, our role is to help connect our customers’ resources to the higher value markets where they are needed,” Robinson added. “We know our customers are facing new competitive challenges, and we are working with them to find solutions so we can all share in the long-term success of the WCSB.”

Dawn LTFP shippers have agreed to long-term contracts that will transport enough natural gas to heat more than six million North American homes daily.