* 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 (Reuters) - 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 on Tuesday.
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 corporate approvals.
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 sessions.
However TransCanada's pipeline is expected to get an easier ride.
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 projects.
"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 producers.
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)