On Jun 4, NOVA Gas Transmission Ltd., a wholly-owned subsidiary
of the pipeline operator
), entered into an agreement with the Canadian arm of the U.S.
) to provide natural gas transportation services through its
planned Merrick Mainline Pipeline.
The Pipeline will transport about 1.9 billion cubic feet (Bcf) of
natural gas per day through NOVA Gas' pipeline system and will be
linked to Chevron and Apache's proposed Pacific Trail Pipeline that
will transport the gas to Kitimat LNG Terminal.
Spread across 260 kilometers, the Merrick Mainline Pipeline Project
is expected to cost C$1.9 billion. TransCanada's management stated
that it currently has four main natural gas pipelines under
development with an investment base of C$12.6 billion.
The Merrick Mainline Pipeline Project is progressing well.
TransCanada plans to apply for necessary approvals to build the
project in the final quarter of the year. The pipeline construction
also depends on the Kitimat LNG project receiving a positive Final
Investment Decision (FID). The company expects the pipeline to
commence operations in the first quarter of 2020.
The company mentioned that under the commercial agreement with
Chevron and Apache, the delivery volume should be an average of 1.9
Bcf per day between 2020 and 2022. The proposed pipeline project is
an important part of the company's growth plans. TransCanada's
growth plan includes completion of several commercial projects by
the end of 2020 with a total investment plan of C$38 billion.
Calgary-based TransCanada currently has a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
equity market in the next one to three months.
Meanwhile, one can consider a better-ranked player from the oil
production and pipeline industry such as
EQT Midstream Partners, LP
). The partnership sports a Zacks Rank #1 (Strong Buy).
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