TransCanada to build a $5 billion gas pipeline for Progress Energy

TransCanada Corp (TSX, NYSE: TRP), the country’s largest pipeline company, said Wednesday it would build a $5 billion (Cdn$6) pipeline for Progress Energy Canada (TSX:PRQ) to carry natural gas from the Peace River region in northeastern British Columbia to a proposed gas export plant at Port Edward on the Pacific coast.

Progress Energy Canada, which was formed after Malaysia’s Petronas acquired Canada’s Progress Energy Resources Corp for $5.2 billion in December, plans to build the plant for a cost close to $11 billion.

“The proposed Prince Rupert Gas Transmission project will allow British Columbians, and all Canadians, to continue to benefit from the responsible development of the growing supply of valuable natural gas resources in the WCSB”, said in a statement Russ Girling, TransCanada’s President and CEO.

“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 – demonstrating the confidence that LNG sponsors continue to place in our ability to design, build and safely operate pipeline systems,” added Girling.

“Our 60 years of pipeline experience, including 50 years in B.C., has taught us that to advance a project of this size, we must engage in open and meaningful discussions with Aboriginal communities and key stakeholder groups.  We will initiate those conversations very soon.”

The Prince Rupert Gas Transmission project is expected to have an initial capacity of about 2 billion cubic feet of gas per day.