Successful Canadian Mainline open season for TransCanada
TransCanada Corporation (ticker: TRP) said the successful conclusion of its long-term, fixed-price Open Season to transport natural gas on the Canadian Mainline from the Empress receipt point in Alberta to the Dawn hub in Southern Ontario generated binding, long-term contracts from Western Canada Sedimentary Basin (WCSB) gas producers to transport 1.5 PJ/d of natural gas at a simplified toll of $0.77/GJ. The Canadian Mainline pipeline system is a regulated cost of service system that currently transports about 20% of the natural gas produced in the WCSB to serve Canadian markets and interconnects with the U.S., the company said.
“This new offering helps our customers compete by utilizing existing capacity on the Canadian Mainline, and demonstrates the importance and value of this system to deliver their products to markets in Eastern Canada and the Northeast U.S.,” TransCanada CEO Russ Girling said in a statement.
“In addition to utilizing existing capacity and pipelines already in operation, the incremental revenue generated from this offering will make the Canadian Mainline more competitive,” Girling said.
Canadian Mainline natural gas pipeline system – source: TransCanada
Key highlights of the Revised Long-Term Fixed Pricing Open Season:
- Collectively, customers have signed long-term binding contracts to transport 1.5 PJ/d of natural gas from the Empress receipt point in Alberta to the Dawn hub in southern Ontario, at a single toll of $0.77/GJ.
- The term of the contract is 10 years and has early termination rights that can be exercised following the initial five years of service (upon payment of an increased toll for the final two years of the contract).
- The service can be provided entirely with existing facilities.
- The targeted in-service date is November 1, 2017. The company intends to file an application for regulatory approval with the National Energy Board in April 2017.
Source: TransCanada
Keystone XL update
TransCanada has submitted a new application for a Presidential Permit [required of international pipeline projects] to complete its Keystone XL pipeline system in the U.S. This marks the second time the company is in the approval process for the Keystone XL.
After more than six years in the permitting and application process, on Nov. 6, 2015 the Keystone XL pipeline was rejected by the Obama administration on environmental grounds after satisfying all environmental, legal and technical requirements of the numerous federal and state regulating agencies of states through which it passes.
Media outlets reported Friday that U.S. Secretary of State Rex Tillerson, retired ExxonMobil (ticker: XOM) CEO, had recused himself from the Keystone XL application process, the State Department said in a letter on Thursday to the environmental group Greenpeace, after receipt of a letter demanding from the group.
“Secretary of State Rex Tillerson must recuse himself from any decisions to approve or reject TransCanada’s application for a Presidential Permit for its proposed Keystone XL pipeline,” the March 8, 2017, letter from Greenpeace said. “To date, we have seen no evidence that he has done so and we are writing to ask the Office of Government Ethics (OGE) and the State Department Office of the Legal Adviser to publicly urge Secretary Tillerson to recuse himself. We also request that you make public any information relevant to this decision, including any information about recusals, waivers requested or sought, and further ethics disclosures.”
The State Department responded with its own letter saying, “He has not worked on that matter at the Department of State, and will play no role in the deliberations or ultimate resolution of TransCanada’s application.” The response was from Katherine McManus, the State Department’s deputy legal adviser, Reuters reported.
