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Petronas – Progress award British Columbia Prince Rupert pipeline

TransCanada to connect with Pacific Northwest LNG

Petronas from Malaysia and its Calgary based subsidiary, Progress Energy Canada, selected TransCanada to design, build, own and operate (BOO) the Prince Rupert gas transmission project in British Columbia.

On December 7th 2012, Canada Prime Minister approved Progress Energy Resources Corp. acquisition by Petronas for the amount of $5.2 billion, and to become Progress Energy Canadaa (Progress).

Then on January 9th, Petronas and Progress decided to move ahead on this strategic natural gas supply to their Pacific Northwest liquefied natural gas (LNG) export facility project in British Colombia.

Progress holds 1.9 trillion cubic feet of proven and probable reserves (2P) of unconventional gas in northeast British Columbia and northwest Alberta.

Through Progress, Petronas has become the largest landholder in the Montney shale gas basin in British Columbia.

Progress other assets are located in the Foothills in British Columbia and in the Deep Basin in Alberta.

In this context, Petronas and Progress are planning to connect their Montney shale gas production area to the British Columbia west coast through a 750 kilometers gas pipeline.

If the final route is not yet fully decided, the Prince Rupert gas transmission pipeline should start from Fort St John and end up in Port Edward, near Prince Rupert.

To be located in the Lelu Island in the District of Port Edward, near Prince Rupert, the Pacific Northwestern LNG project was originally planned by Progress with a total capacity of 7.4 million t/y of LNG with two LNG trains, with a third LNG train of 3.8 million t/y to be added in a second phase.

But with Petronas getting involved and the corresponding expansion plans upstream and midstream, the size of the LNG trains should be up sized to 6 million t/y per unit. 

After completing the feasibility study, Petronas and Progress are preparing the pre-front end engineering and design (pre-FEED) of the Pacific Northwestern LNG project for a final investment decision (FID) expected in mid-2014.

Pacific Northwestern LNG office and project team will be located in Vancouver, British Columbia.

Petronas and Progress estimate the Pacific Northwestern LNG project to $9 to $11 billion capital expenditure; they expecting the project to come on stream in 2018. 

Petronas – Progress to invest $6 billion in Prince Rupert gas transmission project 

In a first phase, Petronas and Progress are planning a transportation capacity of 2.0 billion cubic feet per day (bcf/d) natural gas.

In a second phase, the Prince Rupert gas pipeline should see its capacity expanded to 3.6 bcf/d.

Petronas and Progress have estimated the capital expenditure of the Prince Rupert gas transmission project to $5 billion.

In addition to this connection, Petronas and Progress are planning on the next three years to build a local network of pipelines to gather the natural gas production of the Western Canada Sedimentary Basin (WCSB) and collect it to the Nova Inventory Transfer (NIT) trading hub and the NGTL System.

This network of pipelines should increase the capital expenditure by $1 to $1.5 billion to the Prince Rupert gas pipeline project.

In respect with required approvals from British Columbia and Canada Governments, and with on going discussions with First Nations and stakeholders, Petronas and Progress expect TransCanada to have completed the Prince Rupper gas transmission pipeline project in 2018.

TransCanada secured this Prince Rupert Gas Transmission Pipeline project from Petronas and Progress to supply the Pacific Northwest LNG project after winning in June 2012 the Coastal Gas Link pipeline project to feed the Shell Canada LNG project in Kitimat.

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