TransCanada wins 49pc price hike as cost jumps

TORONTO: TransCanada Corp won a 49 per cent price increase for space on the pipeline it’s building to haul shale gas from Appalachian fields as labour shortages and escalating land prices pushed construction costs almost US$1 billion (RM4.11 billion) higher.

United States regulators approved the company’s request to charge gas explorers US$14.663 per dekatherm for space on its Mountaineer XPress Project in West Virginia, said the company.

That’s an increase from the US$9.827 rate approved by the Federal Energy Regulatory Commission just eight months ago.

“The recent surge of pipeline construction activity in the Marcellus and Utica Shale regions caused costs associated with land acquisition and contractor services” to soar, said TransCanada’s Columbia Gas unit.

As output of the furnace and power-plant fuel has surged, pipe operators such as TransCanada, EQT Midstream Partners LP and Dominion Energy Inc are vying to build conduits to carry the gas to urban markets.

The Appalachian region accounted for 29 per cent of total US gas production in July, said the Energy Information Administration.

Pipeline companies are in the process of adding 15 billion cubic feet of new daily hauling capacity by the end of 2020, according to Bloomberg NEF analyst Anastacia Dialynas.