Clean electricity provider TransAlta Corporation and natural gas company Tidewater Midstream and Infrastructure Ltd. announced they have entered into a Letter of Intent (LOL) for Tidewater to build a natural gas pipeline extending for 120 kilometres from its Brazeau River Complex to TransAlta’s generators at Sundance and Keephills.
This pipeline is a part of TransAlta’s strategy to use natural gas instead of coal to power its units at Sundance and Keephills. This conversion will extend operating life, cut operating costs and reduce emissions.
The pipeline’s initial capacity is expected to be at 130 MMcf/d by 2020, with an expansion capability of 340 MMcf/d. The latter figure represents about 50 per cent of TransAlta’s gas demands when running at full capacity. In the LOL, the company has the option to invest up to 50 per cent in the pipeline.
“Construction of the natural gas pipeline supports our strategy of being a low-cost provider of firm, clean and reliable energy,” said TransAlta CEO and president Dawn Farrell.
“In addition, having greater access to natural gas allows TransAlta to blend natural gas with the coal, prior to fully converting the units, allowing us to take advantage of low natural gas prices and to reduce our carbon costs,” Farrell said.
“Tidewater is excited to enter into a long-term arrangement with TransAlta which is supported by a 15-year take or pay agreement that provides oil and gas producers throughout Western Canada with direct connectivity to a new large demand source,” said Tidewater CEO and president Joel MacLeod.