Coastal GasLink Pipeline: TransCanada To Build, Operate $4-Billion Line For Shell

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COASTAL GASLINK PIPELINE
TransCanada Corp. says it has been chosen by Shell Canada Ltd. to build, own and operate a $4-billion natural gas pipeline in British Columbia. | Getty Images

VANCOUVER - TransCanada Corp. (TSX:TRP) said Tuesday it has been chosen by Shell Canada Ltd. to build, own and operate a $4-billion natural gas pipeline across northern British Columbia.

The Calgary-based company said the pipeline will transport natural gas from the Montney region in northeastern B.C. to a liquefied natural gas export facility near Kitimat, B.C.

The Coastal GasLink pipeline is expected to run about 700 kilometres with an estimated initial capacity of 1.7 billion cubic feet per day. An estimated 2,000 to 2,500 jobs will be created to construct the line over two to three years.

"We look forward to having open and meaningful discussions with aboriginal communities and key stakeholder groups, including local residents, elected officials and the government of British Columbia," said Russ Girling, TransCanada's president and chief executive officer.

"Coastal GasLink will add value to British Columbians, particularly aboriginals and communities along the conceptual route, by creating real jobs, making direct investments in communities during construction and providing economic value for years to come."

The Kitimat natural gas export facility is jointly owned by Royal Dutch Shell, alongside other partners, including Korea Gas Corp., Mitsubishi Corp. and PetroChina Company Ltd.

Kitimat is also the endpoint for the $5.5-billion Northern Gateway pipeline project which proposes to transport from Alberta's oilsands to the B.C. coast through a 1,100-kilometre pipeline.

Northern Gateway, which is backed by Enbridge (TSX:ENB), has been criticized by environmental groups, First Nations and B.C.'s Opposition New Democrats.

TransCanada has been at the centre of a controversy over a US$7.6-billion proposal to expand its Keystone XL system and extend it to refineries on the U.S. Gulf Coast.

Critics have argued the Keystone project would increase U.S. dependence on "dirty'' oilsands while supporters have focused on its positive impacts for the struggling U.S. economy.

TransCanada broke the proposed project into two parts after the U.S. government denied a permit for the project in January, and plans to refile a new application for the northern portion of the line that runs form the Canada-U.S. border to Steele City, Neb.

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