UPDATE 4-TransCanada to build $6.6 bln gas lines for Petronas

Wed Jan 9, 2013 4:27pm EST

* New lines will serve LNG plant planned by Petronas unit
    * Project is second Pacific LNG project for TransCanada
    * TransCanada shares rise 2.4 pct
    * TransCanada CEO says confident of Keystone XL approvals

 (Adds detail.)
    CALGARY, Alberta, Jan 9 (Reuters) - TransCanada Corp
 will build pipelines worth as much as C$6.5 billion
($6.58 billion) to supply a Pacific Coast liquefied natural gas
facility planned by the new Canadian unit of Malaysia's
state-owned Petronas as the pipeline company looks to
boost its exposure to a booming LNG sector.
    TransCanada, which is also behind the planned Keystone XL
oil pipeline to the United States from Alberta, said on
Wednesday it plans to build a C$5 billion line, the Prince
Rupert Gas Transmission Project, to carry 2 billion cubic feet
of gas per day from the massive Montney shale gas field in
northeastern British Columbia.
     The destination is an LNG export facility being planned by
Petronas's Progress Energy Canada unit at Port Edward, near
Prince Rupert, British Columbia.
    TransCanada said it will spend a further C$1 billion to
C$1.5 billion to connect the proposed 750-kilometer (465-mile)
Prince Rupert Project line to its NOVA regional pipeline
network. That will link the new line with gas from other areas
of the Montney field as well as gas from Alberta producers. 
    Beset by low prices at home and a sated U.S. market,
Canadian gas producers are rushing ahead with projects to
liquefy their gas so they can tap high-paying Asian consumers.
Plans are in the works for at least a half-dozen LNG facilities
on Canada's Pacific Coast. 
    The LNG developments and natural gas pipelines mostly have
been well received, especially in comparison with Enbridge Inc's
 proposed Northern Gateway oil pipeline to the Pacific.
That plan faces bitter opposition from aboriginal groups along
the line's route through northern British Columbia, who are
worried about spills and tanker accidents.
    TransCanada expects to get continued support from British
Columbia communities. "Recently we have built about C$1 billion
of infrastructure in northeast B.C.," Russ Girling,
TransCanada's chief executive, said in an interview. "Our
process of community engagement and consultation has worked well
for us and I believe those communities trust us."
    The company's shares rose 2.4 percent, or C$1.13, to C$48.39
on the Toronto Stock Exchange on Wednesday. 
    The Prince Rupert project is the second planned by
TransCanada, the country's largest pipeline operator, to serve
the nascent LNG industry on Canada's northern Pacific Coast. 
    It agreed in June to build a C$4 billion line to carry 1.7
bcf of gas per day from northeastern British Columbia to a LNG
facility at the port of Kitimat being planned by Royal Dutch
Shell Plc and partners Korea Gas Corp,
Mitsubishi Corp and PetroChina Co Ltd.
    Northeastern British Columbia contains some of the world's
largest unconventional natural gas reserves. The Montney and
Horn River shale gas deposits alone contain trillions of cubic
feet of gas.  
    Progress Energy Canada, formed after Petronas bought
Canada's Progress Energy Resources Corp for C$5.2 billion in
December, plans to spend up to C$11 billion to build the Prince
Edward LNG plant. 
    Progress and TransCanada expect to finalize definitive
agreements on building the pipelines early this year,
TransCanada said. The Prince Rupert line is expected to be in
service by the end of 2018, subject to regulatory approvals.
    Meanwhile, Girling said he is confident that the Keystone XL
pipeline, a controversial pipeline to link Canada's booming oil
sands with refineries and ports on Texas' Gulf Coast, will get
the final regulatory approvals it needs in the United States.
    He said he "fully expects" the governor of Nebraska to
approve it, and that he is "very optimistic" that the U.S. State
Department will do the same.
    The oil pipeline received a boost last week when Nebraska
regulators said its proposed new route would avoid many of the
ecologically-sensitive areas that led the U.S. government to
block it last year.    
    ($1=$0.99 Canadian)

 (Reporting by Scott Haggett, Maneesha Tiwari in Bangalore and
Nicole Mordant in Vancouver,; Editing by Peter Galloway and
Sofina Mirza-Reid)
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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