TransCanada accelerates Canada pipeline for Petronas LNG terminal


Reuters

UPDATE 1-TransCanada accelerates Canada pipeline for Petronas LNG terminal


(Adds details on pipeline, background)
    By Ethan LouCALGARY, Alberta, March 20 (Reuters) - Transcanada Corp
<TRP.TO> has secured commitments from shippers for a pipeline to
Malaysian state-owned oil company Petronas' pending Pacific
NorthWest liquefied natural gas terminal in western Canada and
will seek early construction, the company said on Monday.
    Government construction approval will allow the company to
start building most of the North Montney Mainline before
Petroliam Nasional Bhd [PETR.UL], or Petronas, decides whether
to commit to the project, TransCanada said in a statement.
    While the Canadian government has green-lit the C$36 billion
($27.25 billion) LNG project in northern British Columbia,
majority-owner Petronas has put off a decision on whether to
proceed with it. [nL2N1C32GS]
    It is unclear how North Montney and its committed shippers
will be affected if Petronas eventually decides against Pacific
NorthWest, though there are more than a dozen other LNG
terminals proposed along the west coast.
    Asked on Monday whether Petronas has given any assurances on
commitment, TransCanada said North Montney "should not be
interpreted as changing any aspect of the decision process."
    Petronas and Pacific NorthWest did not immediately respond
to requests on Monday for comment.
    Canada's approval for the project came last year after a
three-year wait. Analysts have been skeptical about its
prospects, given current low gas prices and cost-cutting at the
Malaysian oil giant. [nL1N1D81GY]
    The project has also faced opposition from environmental and
aboriginal groups, some of which have sued.
[nL1N1CX1QY][nL4N1CW24U]
    Late last year, media reports said Petronas had identified a
new location for the plant to cut costs and address
environmental concerns. But the company has been mum about its
intentions, saying only that it will study market conditions
before determining its next steps. [nL4N1FY2ZX]
    In TransCanada's statement, it said construction will cost
about C$1.4 billion ($1.05 billion), and it has secured 20-year
contracts with 11 shippers for approximately 1.5 million
gigajoules per day of gas.
    "TransCanada plans to begin construction in the first half
of 2018, with facilities being phased into service over a
two-year period, beginning in April 2019," the company said.
    TransCanada was previously granted government approval for
North Montney on condition of a positive final investment
decision.
    Canadian gas producers have been increasingly squeezed from
the lucrative eastern market by U.S. rivals, which have lower
transportation costs and have been looking for growth in the
Asian market through LNG exports. [nL2N1GQ1UA]

($1 = 1.3356 Canadian dollars)

 (Reporting by Ethan Lou; Editing by Dan Grebler)
 ((Ethan.Lou@thomsonreuters.com; +1-403-531-1634; Reuters
Messaging: ethan.lou.thomsonreuters.com@reuters.net))

Keywords: CANADA LNG/TRANSCANADA (UPDATE 1)



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