Why TransCanada’s major projects are part of its capital program



TRP’s capital program

TransCanada Corp’s (TRP) growth strategy includes a $38 billion capital program. The growth strategy is for the next decade. It plans to develop several new infrastructure assets.

The $38 billion capital program includes $12 billion in small to medium-sized projects and $26 billion in large scale projects.


2014 plans

In 2014, TRP expects to spend ~$5 billion on new and existing capital projects—excluding Keystone XL.

TRP’s main projects in 2014 include:

  • Merrick Mainline Pipeline project – the $1.9 billion project is an extension of the NGTL System. It secured commercial support. The pipeline will transport natural gas through the NGTL System to the inlet connected to the Kitimat LNG Terminal near British Columbia. The project is subject to approvals. The company expects Merrick Mainline to be in service in 1Q20.
  • Tamazunchale Pipeline Extension project – construction is currently expected to be completed by the end of September 2014.
  • It received regulatory approval for the $800 million Northern Courier Pipeline project.

Other important highlights include:

  • Energy East Pipeline – the estimated cost of the project is ~$12 billion. The pipeline is subject to regulatory approvals. It’s anticipated to be in service in late 2018. We’ll discuss this project in more detail later in the series.
  • Keystone XL – On April 18, 2014, the U.S. Department of State (or DOS) announced that the “National Interest Determination period” has been extended indefinitely. This will allow them to think about the potential impact of the Nebraska portion of the pipeline route. As of June 30, 2014, TRP invested $2.4 billion in the project.
  • Prince Rupert Gas Transmission project – regulatory approval for the pipeline is expected in 4Q14. A final investment decision from Pacific Northwest LNG is expected at the end of 2014.

Pacific Northwest LNG is an export facility planned near Prince Rupert. The facility would liquefy and export natural gas produced by Progress Energy Canada Ltd. It represents an investment of ~$11 billion. Its stakeholders include PETRONAS, Sinopec, JAPEX, Indian Oil Corporation, and PetroleumBRUNEI.

Key exchange-traded funds (or ETFs)

TRP is a component of the Alerian Energy Infrastructure ETF (ENFR) and the First Trust North American Energy Infrastructure Fund (EMLP). Other top holdings in both of these ETFs include Enbridge Inc. (ENB) and Williams Companies Inc. (WMB).

In the next part of the series, we’ll discuss the Keystone XL controversy.

Visit the Market Realist Energy MLPs page to learn more.

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