Pipeline Profiles: TransCanada Mainline

Pipeline system and key points

Updated September 2018

TransCanada Mainline pipeline system map

TransCanada PipeLines Limited (TCPL) owns the TransCanada Mainline. The pipeline transports natural gas produced in the Western Canadian Sedimentary Basin to consumers in eastern Canada and the United States. Since the mid–2000s on the eastern portion of the Mainline some export points were reversed to become import points and bring natural gas produced in the Appalachian Basin into Canada.

The pipeline commenced operations in 1958. At the end of 2016, NEB-regulated assets included 14 125 km of pipeline and various auxiliary infrastructure.

The TransCanada Mainline extends from the Alberta/Saskatchewan border across Saskatchewan, Manitoba and Ontario, and through a portion of Quebec.

Key points on the TransCanada Mainline include:

  • Prairies (Empress):  interconnect with the NOVA Gas Transmission Ltd. (NGTL) system at the Alberta/Saskatchewan border near Empress, Alberta. Empress is the largest receipt point on the Mainline.
  • Emerson: export interconnect with the Viking Gas Transmission Pipeline at the Canada-U.S. border near Emerson, Manitoba.
  • Emerson II: export/import interconnect with the Great Lakes Gas Transmission Pipeline on the Canada-U.S. border near Emerson, Manitoba.
  • Northern Ontario Line (NOL): segment of the Mainline which begins near compressor  41 in Manitoba and extends to compressor station 116 near North Bay, Ontario.
  • Eastern Triangle – NOL Receipts: includes receipts from the NOL segment which are measured at station 116 in North Bay, Ontario.
  • Eastern Triangle – Parkway Receipt: includes receipts from Parkway East, Parkway West and King’s North, all located in the greater Toronto area, Ontario.
  • Chippawa: import interconnect with the Empire Pipeline at the Canada-U.S. border near Niagara Falls, Ontario. Prior to 2015, Chippawa was an export point.
  • Niagara: import interconnect with the Tennessee Gas Pipeline and the National Fuel Gas Pipeline at the Canada-U.S. border near Niagara Falls, Ontario. Prior to 2012, Niagara was an export point.
  • Iroquois: export interconnect with the Iroquois Gas Transmission System at the Canada-U.S. border near Iroquois, Ontario.
  • Other US Northeast: export interconnects with three smaller U.S. pipelines at the Canada-U.S. border near Cornwall, Ontario and Napierville and Phillipsburg, Quebec. ‘Other US Northeast’ flows is an aggregate of these three export points.

TCPL has been adding pipeline facilities in the Eastern Triangle to meet market demand, relieve Mainline constraints and enable more natural gas to flow into Ontario from the U.S.

In November 2017, the Board approved [Document 3392379] the Iroquo the Ottawa Project and the Richmond Project which are collectively known as the SE Ontario Meter Station Project [Folder 3173053]. The project entails modifications to the Iroquois export meter station in Ontario to facilitate bi-directional flow and upgrades to existing meter stations in Ottawa.

In August 2016, the Board approved TCPL’s Vaughan Mainline Expansion Project [Folder 2856848] (Order XG-T211-020-2016) [Filing A78823]. The project was underpinned by 15-year contracts from 12 shippers for 425 terajoules per day (TJ/d) of incremental firm service and entailed construction of approximately 12 km of pipeline looping, valves and other associated facilities in Vaughn, Ontario. The project came online in November 2017.

In June 2015, the Board approved TCPL’s King’s North Connection Pipeline Project [Folder 2498195] (Order XG-T211-027-2015) [Filing A70496]. The project was underpinned by 15-year contracts from 2 shippers for 364 TJ/d of incremental firm service and entailed construction of approximately 11 km of pipeline looping, valves and other associated facilities in Toronto, Ontario. The project came online in November 2016.

In May 2015, the Board approved TCPL’s Greater Golden Horseshoe Facilities Project [Folder 2695030] (Order XG-T211-025-2015) [Filing A69916]. The project was underpinned by 15-year contracts from three shippers for 123 TJ/d of incremental receipts from Chippawa and 224 TJ/d from Niagara. The project came online in late 2015.

Official Board documents related to the construction, operation and maintenance of the TransCanada Mainline can be found here: TransCanada Mainline regulatory documents (facilities) [Folder 90715].

You can see the TransCanada Mainline and all NEB-regulated pipelines on the Board’s Interactive Pipeline Map. The map shows more detailed location information, the products carried by each pipeline, the operating status and more.

Condition Compliance

Updated September 2018

Every pipeline company in Canada must meet federal, provincial or territorial, and local requirements. This includes Acts, Regulations, rules, bylaws, and zoning restrictions. Pipelines are also bound by technical, safety, and environmental standards along with company rules, protocols and management systems. In addition to these requirements, the Board may add conditions to regulatory instruments that each company must meet. Condition compliance is monitored by the Board and enforcement action is taken when required. For a detailed list of conditions that TCPL must meet, and their status, please see the condition compliance table and search for “TransCanada PipeLines Limited”.

Safety Performance

Updated September 2018

The Board holds the companies it regulates accountable to protect the safety of Canadians and the environment. As part of this accountability, companies must report events such as incidents and unauthorized activities to the Board. For a summary of pipeline incidents and unauthorized activities on the TransCanada Mainline since 2008, visit the Safety performance dashboard and select “TransCanada PipeLines Limited”.

Emergency Management

Updated September 2018

The NEB checks to make sure companies are keeping pipelines safe by doing inspections, in-depth safety audits, and other activities. Yet, even with these precautions, an emergency could still happen. Sound emergency management practices improve public safety and environmental protection outcomes, and provide for more effective emergency response.

The NEB holds its regulated companies responsible for anticipating, preventing, mitigating, and managing incidents of any size or duration. Each company must have an emergency management program that includes detailed emergency procedures manuals to guide its response in an emergency situation. We oversee the emergency management program of a regulated company’s projects until they cease to operate.

The Board requires companies to publish information on their emergency management program and their emergency procedures manuals on their websites so Canadians can access emergency management information. To view TransCanada Mainline’s Emergency Response Plans, view TransCanada’s Rocky Mountain Region, Central Region, Northern Ontario Region, and Eastern Region plans at its Emergency Preparedness website.

Throughput and capacityFootnote 1

Updated quarterly

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Tolls

Updated September 2018

A toll is the price charged by a pipeline company for transportation and other services. Tolls allow pipeline companies to safely operate and maintain pipelines. Tolls also provide funds for companies to recover capital (the money used to build the pipeline), pay debts, and provide a return to investors. The interactive graph below shows TransCanada Mainline tolls on major long-haul and short-haul paths. Long-haul paths have Empress as a receipt point, while short-haul paths have receipt points east of Saskatchewan, such as Union Parkway Belt. Tolls increased in January 2015 to cover costs of new facilities in the Eastern Triangle.

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.

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 (Application for Business and Services Restructuring Proposal and 2012 and 2013 Mainline Final Tolls [Folder 711778], RH-003-2011), the outcome of which resulted in much lower multi-year fixed tolls. Also in this decision, the Board gave TransCanada discretion in the pricing of interruptible transportation capacity. When the RH-003-2011 Decision was implemented in mid-2013, firm contracts from Empress increased.

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 (Application for Approval of Mainline 2015-2030 Settlement) [Folder 2397890]. 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 was expected to be in place until 2020 with a review in 2017. On 18 December 2017 TransCanada filed an Application for 2018-2020 Mainline Tolls [Filing A88754].

In October 2017, the Board approved TransCanada’s Dawn Long-Term Fixed Price (Dawn LTFP) [Folder 3224371] service. Under the Dawn LTFP service, 23 shippers subscribed to transport 1.5 PJ/d from Empress to Dawn for a ten-year term, at a fixed price of $0.77/GJ.

In July 2017, the Board approved TransCanada’s Herbert Long-Term Fixed Price service [Folder 3173691]. Under this service, one shipper subscribed to transport 58 TJ/d from Empress to the Herbert delivery point in Saskatchewan for a 10-year term, at a fixed price of $0.12/GJ.

A list of shippers on the TransCanada Mainline is available on the TransCanada website (Contract Demand Energy, Future Contract Demand Energy reports).

Official Board documents related to the traffic, tolls and tariffs for the TransCanada Mainline can be found here: TransCanada Mainline regulatory documents (tolls and tariffs) [Folder 92843].

Abandonment funding

Updated May 2018

The Board requires all pipelines to set aside funds to safely cease operation of a pipeline at the end of its useful life. In 2016, TCPL estimated it would cost $2.9 billion to do this for the Mainline. These funds will be collected over 25 years and are being set aside in a trust. Official Board documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Pipeline financial information

Updated March 2018

Pipeline companies report important financial information to the Board quarterly or annually. A solid financial position enables companies to maintain their pipeline systems, attract capital to build new infrastructure, and meet the market’s evolving needs. The data in this table comes from TransCanada Mainline’s Quarterly Surveillance Reports [Folder 155521].

The Mainline’s revenue increased from 2014 on due to increased contracting and the ability to set higher tolls for non-firm services.

Table 1: TransCanada Mainline financial data
  2010 2011 2012 2013 2014 2015 2016 2017
Revenues (millions) $1 818 $1 856 $1 559 $1 519 $1 645 $2 397 $2 128 $1 900
Net income (millions) $263 $247 $266 $273 $293 $201 $187 $180
Average rate base (millions) $6 447 $6 165 $5 776 $5 752 $5 612 $4 617 $4 074 $3 924
Deemed equity ratio 40% 40% 40% 40% 40% 40% 40% 40%
Return on equity 10.2% 10% 11.5% 11.88% 13.06% 10.86% 11.50% 11.50%

Corporate financial information

Updated January 2018

The TransCanada Mainline is owned and operated by TransCanada PipeLines Limited (TCPL). TCPL has operations in Canada, the United States and Mexico and operates three core businesses: natural gas pipelines, liquids pipelines and energy. In 2016, the Mainline accounted for approximately 10% of TCPL’s net income. All financial ratios have remained stable and TCPL’s credit ratings remain investment grade.

Credit ratings and financial ratios provide an idea of the financial strength of a company, including its ability to attract capital to build new infrastructure and meet financial obligations. The credit ratings below are expert opinions of how likely the debt issuer is to live up to its obligations. The financial ratios provided below were calculated by DBRS.

Table 2: TransCanada PipeLines Limited financial ratios and credit ratings
  2013 2014 2015 2016 2017
Interest and fixed-charges coverage ratio 2.40 2.68 2.55 2.37 n/a
Cash flow-to-total debt and equivalents ratio 15.5% 15.9% 13.8% 11.0% n/a
DBRS credit rating A (low) A (low) A (low) A (low) A (low)
S&P credit rating A- A- A- A- A-
Moody’s credit rating A3 A3 A3 A3 A3

Financial regulatory audits

Updated March 2018

The Board audits pipeline companies to confirm compliance with the National Energy Board Act, regulations, Board orders and Board decisions. Financial regulatory audits focus on toll and tariff matters such as detecting cross-subsidies. TransCanada Mainline’s last audit was completed in March 2017. Official Board documents related to TransCanada Mainline’s financial regulatory audits can be found here: [Folder 571547].

 

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