TransCanada Corporation has decided to invest C$2.4bn ($1.9bn) to expand its Nova Gas Transmission Line (NGTL) natural gas system in Western Canada.

The NGTL expansion will boost basin export capacity by one billion cubic feet of natural gas per day (bcfpd).

According to TransCanada, NGTL completed an open season for existing and export capacity at the Empress / McNeill Export Delivery Point that was oversubscribed.

The company has also executed binding agreements with shippers that will begin in November 2020 and April 2021, with an average contract term of 28.6 years.

TransCanada president and chief executive officer Russ Girling said: “The successful open season shows strong industry support to significantly expand transmission capacity out of the basin and improve market connectivity for Canadian natural gas production.

“We continue to work diligently with industry to facilitate economic access for their natural gas to key export markets, including access to Eastern Canada and the US North East through TransCanada’s Canadian Mainline and downstream systems.”

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“The successful open season shows strong industry support to significantly expand transmission capacity out of the basin and improve market connectivity for Canadian natural gas production.”

The expansion programme will see the construction of approximately 375km of large diameter pipeline, compression facilities, meter stations and other related facilities.

A project description is expected to be filed with the National Energy Board by the second quarter of this year.

Following the receipt of regulatory approvals, construction is expected to start next year.

Girling added: “This programme will provide much-needed transportation solutions for Western Canadian natural gas producers and unlock access to existing Canadian Mainline capacity.

“The NGTL System is a strategic TransCanada asset and we are committed to providing shippers with timely and competitive options to connect growing basin supply to downstream markets throughout North America.”

With the latest C$2.4bn expansion programme, the total near-term NGTL growth commitment has increased to nearly C$7.2bn ($5.7bn).