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Pipeline Profiles: NOVA Gas Transmission Ltd. (NGTL)

Pipeline system and key points

Section updated June 2019

NOVA Gas Transmission Ltd. owns the NGTL system, a natural gas gathering and transportation system in Alberta and northeastern British Columbia. NGTL transports natural gas produced in the Western Canadian Sedimentary Basin to markets in Canada and the United States. The pipeline commenced operations in 1957 and NGTL came under NEB jurisdiction in 2009. Prior to that date, NGTL was under provincial jurisdiction and regulated by the Alberta Utilities Commission (AUC) and its predecessors.

NGTL has about 1 100 receipt points and over 300 delivery points. NEB-regulated assets include approximately 24 500 km of pipeline and various auxiliary infrastructure.

In 2018, NGTL delivered over 4.5 trillion cubic feet of natural gas. This equates to 12.4 billion cubic feet per day (Bcf/d) or 348 million cubic  metres per day (million m³/d). Intra-basin demand has grown, and in 2018 55% of contract demand was destined for markets within Alberta and B.C. and only 45% was destined to other markets through interconnected pipelines. These markets include the Pacific Northwest and California, the Midwestern United States, and Eastern Canada and the U.S.

Key points on NGTL include:

  • East Gate – In the southeastern portion of the NGTL system, the East Gate interconnects with TransCanada's Canadian Mainline (near Empress, Alberta) and TransCanada's Foothills Pipeline (near McNeill, Alberta).
  • West Gate – In the southwestern portion of the NGTL system, the West Gate interconnects with TransCanada's Foothills Pipeline (British Columbia).
NOVA Gas Transmission Ltd. pipeline system map

Source: NEB

Text version of this map

This map provides an overview of the NGTL pipeline.

  • Upstream of James River – Throughputs in the northwestern portion of the NGTL system. Upstream of James River flows contain receipts from the Horn River and the Groundbirch pipelines (part of NGTL).
  • North and East – Throughputs to delivery areas in northern Alberta, including natural gas used for oil sands operations.

NGTL is expanding at a rapid pace. New supply has entered the system, particularly from the Montney formation in the northwest portion of the system. In mid-2017, NGTL announced it has a $7.1 billion near-term capital program targeted for completion by 2021.

Official NEB documents related to the construction, operation and maintenance of the NGTL pipeline can be found here: NGTL regulatory documents [Folder 554112].

You can see the NGTL pipeline 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 You can also view maps on TC Energy’s website.

Throughput and capacity

Section updated quarterly (early March, mid-May, mid-August and mid-November)

Note: The physical capacity of a pipeline is based on many factors such as the direction of flow, ambient temperature, pipeline compression, and maintenance work or other pressure restrictions. The operational capacity at each key point may also reflect contracts for transportation service, and supply and demand across the system. The actual physical capacity of the pipeline may, at times, be higher than the assumed operational capacity stated here.

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

Tolls

Section 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 the NGTL tolls on major paths since 2009. These tolls are calculated using the receipt firm transportation average demand rate (3-year term) plus delivery firm transportation demand rate (1-year term) to major delivery points. Major delivery points include Empress/McNeill border where NGTL connects with TransCanada’s Canadian Mainline and Foothills Saskatchewan; the Alberta-BC border where NGTL connects with Foothills BC; and the Gordondale border/Boundary Lake border. Tolls on NGTL have been increasing since 2012, particularly with expansions to enable increasing throughputs. The combination of higher throughput and billing determinants in 2018 and a substantive regulatory amortization credit that was carried over from 2017 to 2018 resulted in NGTL’s 2018 final tolls being six to 11 per cent lower than the comparable 2017 tolls.

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

Tolls on NGTL are based on a cost of service model. Customers contract separately for receipt and delivery services. In August 2010, the Board approved a new tolls design methodology for NGTL (RHW-1-2010) [Filing A25890]. New tolls came into effect on 1 November 2010. Under the revised toll methodology, delivery tolls on NGTL are calculated depending on the distance and service offering. Receipt tolls on NGTL are location-specific and are subject to pricing floors and ceilings. NGTL operated under revenue requirement settlements for 2010 to 2018.

Official NEB documents related to the traffic, tolls and tariffs for NGTL can be found here: NGTL toll documents [Folder 554137].

Abandonment funding

Section updated June 2019

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, NOVA Gas Transmission Ltd. estimated it would cost approximately $2.5 billion to do this. These funds will be collected over 30 years and are being set aside in a trust.

Table 1: NGTL’s abandonment trust fund balance
  2015 2016 2017 2018
Trust fund balance ($) 101 046 000 195 269 000 298 602 000 408 397 000

Official NEB documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Pipeline financial information

Section updated June 2019

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 NGTL’s quarterly filings [Folder 567096] filed with the Board. NGTL’s revenue, net income and rate base have been growing due to system expansions and increased throughput.

Table 2: NGTL financial data
  2010 2011 2012 2013 2014 2015 2016 2017 2018
Revenues (million $) 1 117 1 200 1 354 1 506 1 614 1 767 1 822 1 866 2 007
Net income (million $) 194 196 198 232 228.5 245 281 304 349
Average rate base (million $) 4 834 4 878 5 178 5 671 5 917 6 094 6 526 7 122 8 396
Return on rate base (%) 8.43 8.32 8.07 7.81 7.37 7.49 7.67 7.38 7.18
Deemed equity ratio (%) 40 40 40 40 40 40 40 40 40
Return on equity (%) 10.04 10.03 9.57 10.23 9.65 10.06 10.75 10.67 10.39

Corporate financial information

Section updated June 2019

NOVA Gas Transmission Ltd. is a wholly-owned subsidiary of TransCanada PipeLines Limited (TCPL). TCPL has operations in Canada, the United States and Mexico. It operates three core businesses: natural gas pipelines, liquids pipelines and power generation. In 2016, NGTL accounted for approximately 15% of TCPL’s earnings. All financial ratios have remained stable and NOVA Gas Transmission Ltd. 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 3: NOVA Gas Transmission Ltd. financial ratios and credit ratings
  2012 2013 2014 2015 2016 2017 2017
EBIT interest coverage times 2.10 2.34 2.20 2.20 2.19 2.04 2.06
Cash flow-to-total debt and equivalents ratio (%) 12.6 13.6 12.6 11.7 11.1 9.5 9.7
DBRS credit rating A A (low) A (low) A (low) A (low) A (low) A (low)
S&P credit rating A- A- A- A- A- A-
Moody’s credit rating A3 A3 A3 A3 A3 A3

Financial regulatory audits

Section 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. NGTL’s last audit was completed in October 2015. Official NEB documents related to NGTL’s financial regulatory audits can be found here: [Folder 2905712].

Condition Compliance

Section 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 NGTL must meet, and their status, please see the condition compliance table and search for “NOVA Gas Transmission Ltd.”

Safety Performance

Section updated June 2019

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 to the NEB events such as incidents and unauthorized third-party activities that happen without the pipeline company’s written consent. For a summary of pipeline incidents and unauthorized activities on the NGTL pipeline since 2008, visit the Safety performance dashboard and select “NOVA Gas Transmission Ltd.”

Emergency Management

Section 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 as long as they 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 NGTL’s Emergency Response Plans, view TransCanada’s Rocky Mountain Region and Wild Rose Region plans at its Emergency Preparedness website.

 

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