By Nia Williams
(Reuters) -The Canadian government on Wednesday approved an expansion to TC Energy's NOVA Gas Transmission Ltd (NGTL) pipeline system in Alberta, which will help improve market access for western Canadian natural gas.
The West Path Delivery 2023 (WP2023) project will add about 40 kilometres (25 miles) of new natural gas pipeline to the existing 25,000-kilometre NGTL system, which ships gas across Canada and to U.S. markets.
It is part of a C$1.2 billion ($893.3 million) expansion program first announced by TC in 2019 and underpinned by approximately 258 million cubic feet per day (mcf/d) of new long-term firm service contracts.
TC said it was pleased with the decision and construction was scheduled to begin in the first quarter of 2023, with an anticipated in-service date of Nov. 1, 2023.
"Our expansion programs are an important and integral part in bringing on additional natural gas pipeline capacity to meet growing demand across North America and globally as we work to support energy transition and energy security needs," the company said in a statement.
Canadian natural gas production has grown to record levels of nearly 18 billion cubic feet per day (bcf/d), but congestion on export pipelines can lead to gas being stranded in Alberta and British Columbia, resulting in volatile market moves and deep prices discounts.
Federal natural resources minister Jonathan Wilkinson approved the project with 34 conditions related to environmental protections and the involvement of Indigenous people through employment and training.
The government said the project will create more than 1,160 full-time jobs in Alberta during construction and contribute roughly C$180 million to the province's economy.
($1 = 1.3434 Canadian dollars)
(Reporting by Nia Williams; Editing by Edward Tobin and Lisa Shumaker)