TransCanada Corp. said Aug. 24 that it reached an agreement with Gaz Metro Limited Partnership (GMi), Enbridge Gas Distribution Inc. and Union Gas Ltd. resolving these local gas distribution companies’ (LDCs) issues with the Energy East and the Eastern Mainline projects.

The agreement ensures that Energy East and the Eastern Mainline Project will provide gas consumers in eastern Canada with sufficient natural gas transmission capacity and reduced natural gas transmission costs.

"We have heard the LDCs' concerns and worked with them to address issues in a way that best met our collective objectives," said Russ Girling, TransCanada's president and CEO. "Most importantly, this agreement will benefit consumers with the safe, efficient and more affordable delivery of North American produced oil and natural gas to fuel their everyday lives.”

Under the terms of the agreement, TransCanada will size the Eastern Mainline to meet all firm requirements, including gas transmission contracts that will result from 2016 and 2017 new capacity open seasons. TransCanada will also ensure a long-term benefit to gas consumers in eastern Ontario and Quebec, of at least CA$100 million, through 2050.

Energy East is a proposed 4,600-kilometer (km) (2,900 mile) oil pipeline that will carry 1.1-million barrels of crude oil per day from Alberta and Saskatchewan to refineries and port terminals in Eastern Canada.

TransCanada proposes to convert 3,000 km (1,900 miles) of one of its Canadian Mainline pipelines that is currently not fully contracted on a firm basis from natural gas to oil service for Energy East.

This conversion will lower the comparative cost of transmission service for local natural gas companies, power producers and industrial clients, the company said.

The Eastern Mainline Project will add between 250 km and 300 km (185 miles) of new natural gas pipeline in the Toronto/Montreal corridor.

TransCanada Corp. is based in Calgary, Alberta.