According to Reuters on August 1, TransCanada plans to build a 1,700-mile line to an existing pipeline hub in Canada that would send about 4 billion cubic feet of Alaska natural gas a day to domestic markets. The license does not guarantee construction, but it means TransCanada must move forward on federal permitting applications for the 1,700-mile (2,735-kilometer) pipeline. It's estimated to cost between $26 billion and $30 billion.
The approval comes with up to $500 million in state seed money. It also sets up a race with a competing pipeline venture established by oil giants BP PLC and ConocoPhillips.
TransCanada has estimated that the project will cost $26 billion, while consultants hired by the state put the estimate at $31 billion. Under TransCanada's plan, the pipeline would start shipping natural gas in 2018. If sufficient firm contracts are secured in the open season, TransCanada would begin construction after regulatory approvals are received. TransCanada is targeting to have the pipeline in service by September 2018.
While the Canadian Press wrote on August 3, that but analysts are wondering whether both companies' megaprojects can come to fruition. "They certainly can co-exist if there is a need for both of them," said Desjardins Securities analyst Daniel Shteyn. "The multi-billion dollar question is if there's a need for both of them."
TransCanada, known more as a shipper of natural gas than of heavy oil, is the apparent victor in the race to the Gulf, after securing enough shipping commitments to go ahead with a massive expansion to its Keystone pipeline, a joint venture with U.S. heavyweight ConocoPhillips (COP).
The further question is whether there will be sufficient supply from the oilsands to feed all the new pipeline projects.
A Canadian Association of Petroleum Producers report in June said output from the oilsands by 2020 would be about 200,000 barrels lower than the previous forecasts because of higher capital costs, labour constraints and environmental regulations.
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