September 2018, Vol. 245, No. 9


TransCanada – A Company Near You

By Nicholas Newman, Contributing Editor

TransCanada is a major North American energy-transportation and energy-generation company. Headquartered in Calgary Alberta, it has an American subsidiary in Houston, Texas, and a subsidiary in Santiago de Querétaro, Mexico.

Figure 1

TransCanada is the continent’s fourth-largest pipeline operator, after Kinder Morgan, Energy Transfer and DCP Midstream. Founded to develop the TransCanada pipeline to transport gas from Alberta to Quebec, (now known as the Canadian mainline) by a special act of the Canadian Parliament in 1951, the company completed what was then, in 1958, the world’s longest gas pipeline and which to this day remains Canada’s longest gas pipeline.

Over the decades this Canadian company has evolved into an international company and diversified into construction and operation of oil and gas pipelines, power generation, oil and gas exploration, and marketing of natural gas to Canadian and U.S. customers.

With total assets of $93 billion and a near-term capital investment program of about $28 billion, TransCanada is the country’s second-largest company after Enbridge and enjoys good growth prospects as forecast demand for gas rises by 29 Bcf/d, driven by LNG exports, gas-fired power-generation and industrial demand.

Operational Facts

The company comprises three core businesses: natural gas pipelines, a network of liquids pipelines and power-generation in Canada and the United States.

Figure 2: The market for gas in North America (source: TransCanada)

Gas Pipeline Network

Currently, TransCanada owns and operates one of North America’s largest natural gas pipeline networks at nearly 57,000 miles (92,000 km), which is divided into three regionial operations: Canadian Natural Gas Pipelines; U.S. Natural Gas Pipelines and Mexico Natural Gas Pipelines.

The U.S. network taps into nearly every major gas production basin, including Bakken, Marcellus and the Powder River Basin, and serves major markets in California, Eastern Canada and New York. Astonishingly, TransCanada transports at least a quarter of North America’s daily gas requirements (Figure 1).

In addition, TransCanada is one of North America’s largest natural gas storage operators storing up to 653 Bcf in depleted underground gas reservoirs in Alberta, Ohio and West Virginia.

Market for Gas

TransCanada serves a diverse set of market segments, including residential, industrial, power generation and LNG exportation, whose demand for reliable and affordable energy is forecast to grow by 29 Bcf/d over the next decade (Figure 2).

Canadian Business

In Canada, TransCanada owns and operates two main pipeline networks: the NGTL System and the Mainline.

NGTL System (24,320 km) – The NGTL System transports 11 Bcf/d of natural gas within Alberta and northeastern British Columbia and connects with TransCanada's Canadian Mainline, Foothills System, and other third-party pipelines.

About 40% of deliveries in 2016 were in Alberta and British Columbia. The Pacific Northwest and California, and the midwestern United States each took 19%, while and 22% was delivered to eastern Canada and the U.S. through various interconnected pipelines.

This pipeline began operations in 1957 and came under the jurisdiction of Canada’s regulator, the National Energy, in 2009. In June, TransCanada announced it will move forward on a $140-million expansion of its NOVA Gas Transmission Ltd. (NGTL) System.

Canadian Mainline (14,077 km) – This long-haul transmission pipeline was constructed to transport natural gas produced in the western Canadian Sedimentary Basin to consumption centers in eastern Canada and the United States. Since its completion in 1958, it has been expanded and currently transports 6.9 Bcf/d of gas from western Canada to markets throughout the country and as far east as the Québec province. In the mid-2000s the eastern portion of the network was reversed, so that eastern Canada could import gas from the Appalachian Basin. In 2017, TransCanada announced it plans to increase capacity by an additional 80 MMcf/d of gas, at a cost of $160-million project to supply more than 300,000 homes.

U.S. Operations

TransCanada, in 1967, saw the start significant operations south of the border in the U.S. with completion of its pipeline extension along the Great Lakes. In 1998, its U.S. pipeline merged with NOVA to create the fourth-largest gas pipeline company in North America. Since then, TransCanada has expanded in the U.S. to gain an interest in the Columbia Gas system, ANR Pipeline System and Columbia Gulf pipeline network, among others.

Columbia Gas 11,255 miles (18,113 km) – This pipeline is crucial to taking off gas from the Marcellus and Utica plays, two of the largest natural gas shale plays in the Appalachian Basin, and carrying it to consumption centers in New England and the Gulf of Mexico.

ANR Pipeline System 9,388 miles (15,109 km) – This pipeline network connects gas from production fields in Texas, Oklahoma, the Appalachian Basin and the Gulf of Mexico with markets in Wisconsin, Michigan, Illinois and Ohio. Also, the ANR system has a bidirectional capability on its Southeast Mainline and delivers gas from the Appalachian basin to customers throughout the Gulf Coast Region.

Columbia Gulf 3,340 miles (5,377 km) – Originally this pipeline network was designed to transport gas from major fields in the Gulf of Mexico to customers in New England. However, this system is being reversed, so it can collect gas production from the Appalachian Basin via other pipelines, including the Columbia gas system, to various Gulf Coast markets.


TransCanada’s involvement in Mexico dates from the mid-1990s, when it constructed two of the first privately owned pipelines in the country. Today, the company has in operation or under construction over 1,982 miles (3,190 km) of gas pipelines with a capacity of 7.1 Bcf/d from an investment of about $5.6 billion.

One of its most recent and significant projects, the $1.2 billion, 670 MMcf/d Topolobampo Pipeline, which began operations in 2018, provides the upstream interconnection with its Mazatlan Pipeline, bringing gas to the power sector of Sinaloa and Sonora.

The 348 mile, 30-inch Topolobampo pipeline runs from El Encino, near the city of Chihuahua to Topolobampo, near the city of Los Mochis, Sinaloa. Together, the Topolobampo and Mazatlan pipelines add over 540 miles (870 km) of energy infrastructure to provide natural gas to power plants and industrial and urban markets in Mexico. The Mexican government plans to expand the pipeline grid at a cost of about $10 billion, but this has been delayed by the need to consult indigenous communities.

In Development

Construction of the 415-mile (670-km), $5.3 billion Coastal GasLink pipeline to connect rich shale fields in Alberta and northeast British Columbia with the proposed $40 billion LNG export liquefaction terminal near Kit mat on British Columbia’s northwest coast will begin in 2019.

TransCanada will own and operate the pipeline, which is designed to carry 5 Bcf of natural gas to the LNG export terminal near Kitimat, a joint venture between Royal Dutch Shell Plc, PetroChina Co Ltd, Mitsubishi Corp and Korea Gas Corp.

Construction of the $3.1 billion South Texas-Tuxpan Gas Pipeline, a 497-mile (800-km) underwater natural gas pipeline, is a joint venture of TransCanada (60%) and Sempra Energy’s Mexican unit IEnova (40%) on behalf of Mexico’s Federal Electricity Commission. It is scheduled for completion in late 2018. This subsea project links Brownsville to the Tuxpan port in Veracruz, Mexico.


TransCanada expects to complete $8.4 billion (CA$11 billion) worth of pipeline expansions by the end of this year and has another $7.6 billion (CA$10 billion) in investments scheduled to come on line in the next few years. These projects should provide the company with enough fuel to expand earnings by nearly 30% by 2020 and support rising dividends. P&GJ

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