Canada’s Pipeline Transportation System 2016

TransCanada Pipe Lines Limited’s TransCanada Mainline

Source: NEB

Text version of this map

This map provides an overview of the TransCanada Mainlinefrom Empress near the Alberta-Saskatchewan boundary, across Canada into southern Ontario and Quebec.

Overview

The TransCanada Mainline was built in the 1950s to move natural gas from the Western Canada Sedimentary Basin (WCSB) to eastern markets. The 14 100 km system extends from the Alberta-Saskatchewan boundary, across Saskatchewan, Manitoba and Ontario, and through a portion of Quebec.

The Prairies segment extends from the Alberta-Saskatchewan border to Compressor Station 41, located near Île-des-Chênes, MB, and from Compressor Station 41, south to a point on the Canada-U.S. border near Emerson, MB. There, the Prairies segment connects to the Great Lakes Gas Transmission (GLGT) and Viking Gas Transmission systems and transports gas to markets in the Mid-western U.S. The Northern Ontario Line (NOL) segment begins at Compressor Station 41 and extends to Compressor Station 116 near North Bay, ON carrying supply from the WCSB. The NOL also contains a small segment that connects Sault Ste. Marie, ON with the GLGT system. South of Station 116, the NOL interconnects with the Eastern Triangle segment of the Mainline. The Eastern Triangle extends to the southeastern and southwestern extremities of the system, supplying Ontario, Quebec, and export markets.

The Eastern Triangle does not depend solely on the WCSB and increasingly receives gas from other sources such as the Appalachian Basin. This has reduced the need for natural gas supplies from the WCSB.

Key Developments

TransCanada PipeLines Limited (TransCanada or TCPL) has been adding pipeline facilities in the Eastern Triangle to relieve constraints, enable more gas to flow into Ontario from the U.S., and meet growing demand.

• The King’s North Connection Pipeline is under construction.
• The Greater Golden Horseshoe Facilities Project came online in January 2016.
• The Vaughan Mainline Expansion Project was approved on 4 August 2016, with Reasons for Decision to follow by 9 September 2016.

TransCanada has two additional projects before the Board. Energy East proposes to convert 3 000 km of natural gas pipeline for crude oil transport, and construct 1 520 km of new pipeline. The Eastern Mainline application proposes to expand sections of the pipeline in Ontario so TransCanada can continue serving gas shippers if the Energy East Project goes ahead.

Utilization

Figure 10.2.1 shows throughput and capacity for the Prairie Segment for 2010-2015. Capacity varies seasonally from 187.2 10⁶m³/d (6.6 Bcf/d) in summer to 201 10⁶m³/d (7.1 Bcf/d) in winter. Throughput has increased since mid-2013 due to a change in contracting patterns following the implementation of the RH-003-2011 toll decision. Throughput averaged 84 10⁶m³/d (3 Bcf/d) in 2015.

Figure 10.2.1: Prairies Segment Throughput vs. Capacity

Sources: TransCanada, NEB

Figure 10.2.2 shows throughput and capacity for the NOL for 2010-2015. Capacity varies seasonally from 101 10⁶m³/d (3.56 Bcf/d) in the summer to 104 10⁶m³/d (3.68 Bcf/d) in the winter. Throughput increases significantly in winter months, as gas demand for home heating in the Eastern Triangle rises. In general, throughput has increased since mid-2013 in line with the Prairies segment. Throughput averaged 61 10⁶m³/d (2.16 Bcf/d) in 2015.

Figure 10.2.2: TransCanada NOL Throughput vs. Capacity

Sources: TransCanada, NEB

Figure 10.2.3 shows throughput and capacity for the Eastern Triangle for 2010-2015. Capacity varies seasonally from 161 10⁶m³/d (5.7 Bcf/d) in winter to 139 10⁶m³/d (4.9 Bcf/d) in summer. Throughput averaged 69 10⁶m³/d (2.4 Bcf/d) in 2015.

Figure 10.2.3: TransCanada Eastern Triangle Throughput vs. Capacity

Sources: TransCanada, NEB

The TransCanadaMainline connects with the Tennessee Gas Pipeline system near Niagara Falls, ON. Figure 10.2.4 shows throughput and capacity for Niagara for 2010-2015. When Niagara became an import point in late 2012, its capacity was 12 10⁶m³/d (0.4 Bcf/d). The capacity increased to 17 10⁶m³/d (0.6 Bcf/d) in November 2015. Throughput averaged 13 10⁶m³/d (0.46 Bcf/d) in 2015.

Figure 10.2.4: TransCanada Mainline Niagara Throughput vs. Capacity

Sources: TransCanada, NEB

At the export point near Iroquois, ON the TransCanada Mainline connects with the Iroquois Gas Transmission System, which supplies natural gas to markets in the U.S. Northeast. Figure 10.2.5 shows throughput and capacity for Iroquois for 2010-2015. Capacity is 39 10⁶m³/d (1.38 Bcf/d). Throughput varies seasonally with utilization rates as high as 79% in winter and as low as 5% in summer. In 2015, throughputs averaged 13 10⁶m³/d (0.46 Bcf/d).

Figure 10.2.5: TransCanada Mainline Iroquois Throughput vs. Capacity

Sources: TransCanada, NEB

Tolls

From 2007 to 2011, the TransCanada Mainline operated under a negotiated settlement based on a cost of service toll methodology. As average throughput declined and tolls increased, TransCanada and its shippers worked to find solutions. TransCanada filed a contested toll application (RH-003-2011), the outcome of which resulted in much lower multi-year fixed tolls. Since then, the Board has held several proceedings to address issues arising from the transition to this new regime.

TransCanada and three eastern local distribution companies (LDCs) returned to the Board at the end of 2013 with an application for a new toll regime incenting TransCanada to build new facilities in the Eastern Triangle. The Board approved this application in December 2014, resulting in somewhat higher tolls, a return to cost of service tolls, and other features. This toll methodology is expected to be in place until 2020 with a review period prior to 2018.

For several years, contracts on the TransCanada Mainline showed two distinct trends. First, long-haul contracts (from Empress across the Prairies and NOL) declined and short-haul contracts (in the Eastern Triangle) increased. Across the lower utilized Prairies and NOL sections, shippers were switching to interruptible or short-term firm contracts rather than using full-year firm service. When the RH-003-2011 Decision was implemented mid-2013, this pattern reversed and firm contracts increased dramatically.

Figure 10.2.6 shows the TransCanada Mainline benchmark toll (Empress to the Union Southwest Delivery Area) and the GDP deflator (normalized) for 2010-2015. Tolls increased in 2011 and 2012 due to a decrease in throughput and declining long-haul firm contract demand. The 2012 toll of $2.24/GJ remained in effect for the first half of 2013, while the RH-003-2011 proceeding was ongoing, and then declined to $1.65/GJ. The lower toll continued through 2014 until higher tolls were approved in 2015 to cover the cost of proposed new facilities.

Figure 10.2.6: TransCanada Mainline Benchmark Toll

Source: NEB

Financial

TCPL is a wholly owned subsidiary of TransCanada Corporation. In addition to the Canadian Mainline, TCPL has other business segments, including NGTL and Keystone. The Mainline’s revenue increased in 2014 and 2015 due to increased contracting and the ability to set higher tolls for non-firm services. TransCanada Corporation’s financial ratios continue to be stable and TCPL’s credit ratings are investment grade.

Date modified:

2022-01-28