* Plans C$4 bln natural gas line
* Line to service Shell's LNG project
* 1.7 bcf per day line in service by 2020
* Shares rise 0.8 pct
(Adds detail and comment)
By Scott Haggett
CALGARY, Alberta, June 5 TransCanada Corp
will build a C$4 billion ($3.8 billion) pipeline to
serve Royal Dutch Shell Plc's planned liquefied natural
gas plant on British Columbia's northern coast, the company said
TransCanada, Canada's No. 1 pipeline company, said it would
design and build a 700-kilometer (434-mile) line capable of
shipping 1.7 billion cubic feet of gas per day from Dawson Creek
in northeast British Columbia to Kitimat, where three LNG
plants, including Shell's facility, are planned.
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.
However the U.S. market is glutted with its own shale gas
production, and British Columbia's producers have pinned their
hopes on LNG exports to tap lucrative Asian markets.
TransCanada said in a statement that it expected to complete
the line by the end of the decade, pending regulatory and
The line will run near Enbridge Inc's Northern
Gateway oil pipeline project, which will also end at Kitimat.
Currently in regulatory hearings, Northern Gateway faces strong
opposition from environmental groups and many of the aboriginal
communities along its planned route.
That opposition has already added more than a year to
regulatory hearings, a delay that encouraged the Canadian
government to put in new rules capping the length of such
However TransCanada's pipeline is expected to get an easier
With little risk of sustained environmental damage from a
rupture, natural gas pipelines have not faced the same
opposition as oil lines. Also, some aboriginal communities, such
as the Haisla who live near Kitimat, have a stake in LNG
"I don't think it will get the same sort of resistance (as
Northern Gateway faces)," said UBS Securities analyst Chad
Friess. "In addition, it's starting from square one and subject
to the accelerated regulatory review that the Canadian
government has put out there."
The line will serve the LNG export facility planned by and
partners Korea Gas Corp, Mitsubishi Corp
and PetroChina Co Ltd.
The partners are considering a plant that would initially
include two units with capacity of 6 million tonnes each
annually, or a total of 2 billion cubic feet a day. The plant
could be in service by 2020.
Two other proposals have already received LNG export
licenses from Canadian regulators. Kitimat LNG is backed by
Apache Corp, Encana Corp and EOG Resources Inc
, while the BC LNG Export Co-operative is made up of the
Haisla First Nation, Houston-based LNG Partners and natural gas
TransCanada shares were up 0.8 percent at C$42.50 in midday
trading on the Toronto Stock Exchange.
($1 = $1.04 Canadian)
(Additional reporting by Aftab Ahmed in Bangalore; Editing by
Lisa Von Ahn)