TransCanada Selected to Build $5 Billion Gas Pipeline for Petronas

By: Tsveta van Son
Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a… read more.
on Jan 10, 2013

TransCanada Corp (TSE:TRP, NYSE:TRP), builder of the planned Keystone XL oil pipeline from the oil sands of Alberta to the USA has also been selected to construct and operate a C$5 billion (£3 billion) liquefied natural gas (LNG) pipeline for Malaysia’s state-backed company Petroleum Nasional Bhd (Petronas), which recently purchased Progress Energy. The news lifted TransCanada’s share price, with the company’s stock rising to C$48.39 on the Toronto Stock Exchange on January 9.

**TransCanada to Build C$5 Billion Pipeline**
On 9 January 2013, the Calgary-based energy infrastructure builder TransCanada announced that it had been selected to build the Prince Rupert Gas Transmission project which will supply a Pacific Coast LNG facility. TransCanada was selected by Progress Energy, which was recently purchased by Petronas for C$5.2 billion.

TransCanada said in a press release that the definitive agreements would be finalised in early 2013, with the pipeline expected to be in service by the end of 2018, subject to regulatory approvals.
Bloomberg reports that TransCanada’s share price rose 2.4 percent to C$48.39 at close of trading in Toronto, after earlier climbing to C$48.40, its highest intraday advance since it began trading more than 30 years ago. “From a trading perspective, we view today’s announcement as an unexpected positive development that should provide support for TRP’s shares,” noted Pierre Lacroix, an analyst at Desjardins Securities Inc, as quoted by Bloomberg.

**West Coast Pipelines**
TransCanada noted that the proposed Prince Rupert Line will transport natural gas primarily from the North Montney gas-producing region to the planned Petronas LNG export facility in Port Edward, British Columbia.
Bloomberg reports that the new project will be the second TransCanada’s West Coast natural gas pipeline, after the company was selected in June to construct the Coastal GasLink conduit, a C$4 billion supply pipeline to an LNG export terminal in Kitimat, British Columbia.

!m[TransCanada Share Price Rises 2.4 Percent On The Announcement](/uploads/story/1175/thumbs/pic1_inline.png)
“It looks like TransCanada is going to be the builder of choice to get gas to the West Coast, with two pipelines running two separate paths, one to Prince Rupert and one to Kitimat,” commented Steven Paget, an analyst at FirstEnergy Capital Corp, as quoted by Bloomberg.

“Together with our previously announced Coastal GasLink Pipeline project, this is the second major natural gas pipeline proposed to Canada’s West Coast for TransCanada,” noted in the company press release TransCanada’s President and CEO Russ Girling.
**Keystone Prospects**
In addition, TransCanada is the company behind the planned controversial Keystone XL pipeline, which is still pending US regulatory approval. Reuters however quotesMr Girling as being confident that the Keystone will get the go-ahead. Mr Girling noted that he “fully expects” the governor of Nebraska to approve it, and that he is “very optimistic” that the US State Department will do the same.
The Keystone pipeline, which is to connect Canada’s oil sands with refineries and ports on Texas’ Gulf Coast, recently received a boost with Nebraska’s regulators noting that its proposed new route would avoid many of the ecologically sensitive areas which prompted the US government to reject the project in 2012.
**TransCanada’s share price closed 2.41 percent higher at C$48.39 on January 9 in Toronto, and 2.29 percent higher at $48.98 on the NYSE.**

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