TransCanada Pipelines to review PRGT project in wake of Petronas cancellation

With the cancellation of the Pacific NorthWest LNG project,
the fate of the Prince Rupert Gas Transmission line is now under review

While most of the attention over the last few days has been directed towards the announcement by Petronas that they were cancelling the Pacific NorthWest LNG project, another major project related to the LNG terminal is now under further review.

With no destination now in place for it's planned pipeline network, TransCanada pipelines has announced that is now reviewing their options related to the Prince Rupert Gas Transmission project and will continue to focus on their significant investments in new and existing natural gas infrastructure to meet customer needs.

In a media release issued following the Petronas announcement, Trans Canada noted that as part of their agreement with the Malaysian Energy giant's affiliate Progress Energy, following receipt of a termination notice, TransCanada would be reimbursed for the full costs and carrying charges incurred to advance the PRGT project.

Karl Johansen, TransCanada's Executive Vice President and President of Canada and Mexico gas pipeline and energy development further noted that TransCanada expects to receive that termination payment later this year.

As for fate of the PRGT pipeline route, the TransCanada announcement provided a bit of background on the history of the planning for the line and where the future may lead.

We are proud of the work we have done along the PRGT route, which has allowed us to sign 14 Project Agreements with First Nations and secure the key regulatory approvals and permits. 

We have built strong new relationships, and we look forward to continuing our strong partnerships with First Nations and communities in B.C. as we develop other natural gas assets, including our North Montney Mainline project. 

This important project is backed by independent 20-year commercial service agreements with 11 shippers (including Progress Energy), and pending regulatory approvals, we remain ready to move forward. 

There is still a strong need for Canadian natural gas supplies to get to market, and the infrastructure we are building in Alberta and British Columbia - including recently announced multi-billion dollar investments in our NGTL system and North Montney Mainline - are designed to help move natural gas supplies to markets where they are needed.

You can review the full announcement from TransCanada here.

Even before Tuesday's cancellation by Petronas, the pipeline project had run into another delay, as a Federal court had ordered the National Energy Board to re-examine jurisdiction issues related to the pipeline route across Northern BC.

Another area of note related to the Petronas decision could be the fate of a number of benefit agreements that had been signed related to the project.

TransCanada pipelines had signed a number of benefits agreements, including training opportunities with local First Nations as part of their work towards securing the pipeline to the North Coast.

Metlakatla signs pipeline benefits agreements tie to LNG development
Metlakatla and Prince Rupert Gas Transmission sign LNG pipeline project agreement
BC's Liberal Government signs LNG agreements with Lax Kw'alaams and Metlakatla First Nation
Prince Rupert Gas Transmission signs project agreement with Lax Kw'alaams Band
PRGT signs project agreement with Gitxsan Hereditary Chiefs
Skills training programs making a difference in B.C.
TRICORP to benefit from $250,000 partnership with Gas Pipeline firms
Nisga'a reach agreement on gas pipeline and keep their own LNG ambitions on track

Further background on the now cancelled Pacific NorthWest LNG project can be reviewed on our archive page.

Cross posted from the North Coast Review