Dependable across the continent: an in-depth look at TransCanada

Natural gas pipeline construction – GTN System – Oregon.

Natural gas pipeline construction – GTN System – Oregon.

For more than 60 years, leading energy infrastructure company TransCanada has safely and reliably operated pipelines across North America. Continuing to do so today, Pipelines International speaks with President and CEO Russ Girling about the company’s operations and future growth.

TransCanada plays a vital role in connecting energy supplies to key North American markets with operations in Canada, the United States and Mexico. Operating one of the largest natural gas transmission networks in North America with 68,500 km of pipelines, the company is tapping into virtually every major gas supply basin in North America.

The company delivers 20 per cent of the natural gas consumed in North America each day. TransCanada is also one of the continent’s largest providers of natural gas storage and related services with approximately 380 Bcf of storage capacity.

President and CEO of TransCanada Russ Girling says the company’s mission is “to provide reliable supplies of energy across the continent, both safely and responsibly, and we are proud that millions of North Americans can depend on us for the energy they need.”

From the beginning

TransCanada was borne out of the development of the TransCanada pipeline, the massive natural gas line that opened in 1958 to connect Alberta’s natural gas supplies with the high-population markets in Ontario and Quebec.

“Now known as the Canadian Mainline, this 14,101 km pipeline remains a critical piece of North American natural gas infrastructure, and is the largest gas transportation system on the continent,” Mr Girling says.

The company has grown steadily through new development and acquisitions of natural gas pipeline infrastructure, eventually merging with NOVA Corp in 1998. This merger brought together NOVA’s extensive Alberta natural gas gathering system with TransCanada’s long-distance Mainline, making TransCanada the major transporter of Canadian natural gas within the Western Canadian Sedimentary Basin and across the continent.

Not just about gas

In the summer of 2010, TransCanada broadened its asset base to include a highly significant entrance into the oil transportation business with the start of commercial operations of the 3,467 km Keystone Oil Pipeline from Alberta to refineries in the United States in July 2010.

Mr Girling says “This area of our business is expected to grow substantially with the development of our proposed Keystone XL and Gulf Coast Project pipelines that will enhance North America’s energy security by providing a safe and reliable source of crude oil for American refinery markets.

“The planned expansion of our Keystone system will make us a leader in transporting Canadian and US growing oil production in the coming decades. Our expanded Keystone system is expected to move approximately one-third of total Canadian oil exported to the US, or
10 per cent of total US imports, by 2025.”

In addition to its oil and gas business, TransCanada owns or has interests in approximately 10,900 megawatts (MW) of power (electricity) generation from 20 facilities in Canada and US through its energy business. This equates to enough power to meet the needs of nearly 11 million homes. The company is Canada’s largest private sector power generator and approximately one-third of the power generated comes from alternative and renewable sources (nuclear, wind, hydro and solar).

Continually improving business

TransCanada continually looks for ways to improve its business and reduce its environmental impact.

Mr Girling says “In our power business, for example, we use highly efficient cogeneration technology whenever possible, and strive to reduce energy consumption. In 2010 we spent more than $CDN6 million (approximately $US5.9 million) on technological research and development to reduce environmental impacts.”

One programme involves the testing of a supersonic injector that captures methane emissions from dry gas seals. This captured gas is used to power turbines that drive gas through the pipeline. This builds on previous dry gas seal technology pioneered by TransCanada that improved the efficiency of the seal, reducing gas leaks and eliminating oil and grease spills.

“We have been recognised for these efforts. For the tenth year in a row, TransCanada was named to the Dow Jones Sustainability Index, a global index that tracks the performance of the leading sustainability driven companies. We are also listed among Canada’s 50 best corporate citizens by Corporate Knights magazine,” Mr Girling says.

TransCanada’s success is a reflection of its exceptional team of over 4,400 employees across North America who bring skill, experience, energy and knowledge to the work they do every day.

“TransCanada’s people are the heart of our competitive advantage. Our path forward lies in committed and motivated people who demonstrate our values of integrity, collaboration, responsibility and innovation.

“Our Matching Gifts Programme matches the fundraising efforts of our employees who are involved in community volunteer efforts. We also support a wide range of professional development opportunities and leadership development and have been named one of Canada’s Top 100 Employers,” Mr Girling says.

Keeping integrity in safety

With one of the best pipeline safety and operating records in the industry, TransCanada monitors its oil pipeline system through a centralised high-tech Operations Control Centre – 24 hours a day, 365 days a year. Using satellite technology data are sent every five seconds from thousands of data points to its monitoring centre in Calgary.

TransCanada’s safety programme begins before construction with the selection of high-quality materials and pipelines are built using industry best practices. Pipe is inspected and pressure-tested for integrity before it ever goes into service. TransCanada’s ongoing integrity management programme includes regular maintenance, monitoring by trained operators 24 hours a day, routine aerial patrol, ground surveys, cathodic protection against corrosion and internal inspections using devices like smart pigs.

Strategising for the future

“Our strategic vision is to become the leading energy infrastructure company in North America. In pursuing this goal, we strive to deliver strong financial performance, execute on our large portfolio of attractive, low-risk projects and continue to create and cultivate a high-quality portfolio of future growth opportunities,” Mr Girling says.

TransCanada’s financial performance continues to build on its strong track record of delivering strong and sustainable earnings and cash flow. Over the past ten years, TransCanada has made significant investments in high quality energy infrastructure assets, which have allowed the company to move forward in achieving its vision.

“We are in the advanced stages of a $CDN23 billion (approximately $US23.1 billion) growth programme that has seen $CDN10 billion (approximately $US9.85 million) in new pipeline and power projects placed into service since 2010. These new operating assets are critical North American infrastructure and have become an important part of our growing asset base,” Mr Girling says.

The company has key projects under development, including the Keystone XL and Gulf Coast Project. Once complete, the expanded Keystone system will have the capacity to move 1.4 million bbl/d of crude oil from Canada and northern US to refinery markets on the Gulf Coast and Illinois.

Mr Girling says “We are also exploring the opportunity of converting some of the Canadian Mainline to crude oil transportation from Alberta to Eastern Canada. This could help Canadian refineries in Ontario and Quebec reduce their reliance in more expensive oil imported from overseas and also allow for increased market diversification through access to international markets, including India, China, and Europe. This would allow Canadian producers to receive a better price for the country’s resources, something all Canadians would benefit from in terms of jobs and taxation revenues from royalties.”

TransCanada is also involved in the emerging LNG market after the company was selected by Shell Canada Limited and its joint venture partners in the LNG Canada project to develop an approximately 700 km pipeline to transport gas across northern British Columbia (BC) to LNG Canada’s proposed export terminal near Kitimat, BC.

Earning community support

“The energy sector is under an enormous amount of scrutiny these days, and pipelines in particular have become targets for environmental activists and others whose goal is to shut down fossil fuel development,” Mr Girling says.

Like many forms of necessary infrastructure, TransCanada has noticed that pipeline construction has become more challenging due to less willingness
of the public to accept the possible impacts of development.

“Pipeline companies have to focus more time and resources on building their social licence to operate, and earning the support necessary to operate across vast distances and through communities,” Mr Girling says.

“We have to be very proactive with communicating our intentions and the benefits of our projects, while also being committed to listening and working with communities to address their concerns.”

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