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Calgary-based pipeline operator TransCanada Corp. has secured long-term commitments for the transportation of nearly 2 billion cubic feet of natural gas per day via its ANR pipeline system Southeast Main Line in the United States.
The average term of the contracts is 23 years. The ANR pipeline will supply shale gas from the Utica and Marcellus shale to a number of delivery points, both north and south, including Michigan, Illinois and Wisconsin, as well as cross-country, to the Gulf Coast, TransCanada said. This year, the pipeline will be carrying an average of 1.25 billion cubic feet per day. The pipeline is expected to start operating at full capacity in 2015, the Canadian company announced.
The project includes 600 million cubic feet per day secured as part of a reversal project on the Southeast Main Line system, which will increase flow capabilities going in both directions, TransCanada explained. The entire capacity expansion project is estimated to cost about $100 million and will be key for securing access to more natural gas in the Gulf Coast, where demand has been soaring thanks to recently approved liquefaction terminals to export products.
Russ Girling, TransCanada's president and chief executive officer, stated that the contracts are evidence of the value of existing long haul gas pipelines, as the ANR remains a major link between natural gas producers and processing industries.