TransCanada chief sees massive opportunity in LNG

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With as much as $30-billion in projects it hopes to build in coming years, TransCanada Corp. is more focused on growth and diversification than financial maneuvers like dividing up the company, its chief executive says.

"People have said, 'would you split up the company?' And maybe a long time down the road, that might be something one might want to think about. But I think currently, we see a huge amount of value in keeping all these businesses together," said Russ Girling, pointing to the company's portfolio of power plants, gas and oil pipelines.

Mr. Girling, who spoke in a year-end interview, has now spent 2.5 years in the top seat at the Calgary-based pipeliner. That time has been dominated by the company's battle to build Keystone XL. But, Mr. Girling said, the $5-billion left to spend on that project – if it gains approval from the U.S. – is comparatively small when set against the broad slate of other projects it is contemplating. TransCanada is already building natural gas pipelines in Mexico, and expects to see more, as Mexico works to import more U.S. gas to fuel its electrical sector.

Add on power plants, like the Napanee Generating Station TransCanada agreed this month to build, a gas pipeline to the West Coast as well as projects like the Grand Rapids pipeline to the oil sands, and the company has some $20-billion in projects ahead of it.

But that doesn't include the likelihood of partially converting its gas Mainline into an oil pipeline to feed eastern Canada and the U.S. – or the possibility of building more pipelines through British Columbia to feed new liquefied natural gas export terminals. Toss those in, and the construction workload leaps.

"We've got $20-billion secured now. Could I see another $10-billion secured over the next 12 months? I think that's a possibility, given the kinds of projects we're working on," Mr. Girling said.

He is particularly bullish on LNG. TransCanada has already signed with Royal Dutch Shell plc to build a $4-billion Coastal GasLink pipeline that would bring natural gas to the Kitimat, B.C., area, where Shell and several Asian partners are planning a massive LNG terminal.

But more is likely to come – perhaps substantially more, Mr. Girling said.

With gas exports, Canada stands to become "a player on the world stage of three to 10 bcf a day," he said. He added: "that's a big number. So there is a potential of a very large opportunity here."

By comparison, Canada currently produces roughly 14 bcf, or billion cubic feet, per day. By some estimates, it could cost $100-billion to build 10 bcf/d of export capacity.

Mr. Girling cautioned, however, that anything that big would not happen quickly.

"How long will it take to ramp up to that kind of level? I think we're talking a decade or two," he said.