TransCanada Launches Open Season to Lowball Marcellus/Utica Gas

open seasonYou may recall that TransCanada, one of Canada’s leading midstream/pipeline companies, cooked up a deal to pipe natural gas from Canada’s West Coast to the East Coast in order to fend off cheap supplies of Marcellus/Utica gas that will flow into Canada when/if the NEXUS and Rover pipelines get built (see TransCanada Pipe Drops Price 42% to Compete with Marcellus/Utica). TransCanada dropped their pipeline price by 42% to lure drillers by (theoretically) making it less expensive to get gas from Western Canada, some 2,400 miles away, than from the Marcellus, just 400 miles away. But all is not butterflies and unicorns with the TransCanada plan. Drillers are balking at having to sign a 10-year agreement in order to get the favorable pricing (see TransCanada’s Plan to Lowball Marcellus/Utica Gas Delayed). The delay is no more. TransCanada has launched a binding (sign on the dotted line) open season for potential customers to sign up for the lowball plan. They have until Nov. 10th. Will it work? We notice that TransCanada has relaxed the 10-year commitment a little bit. Shippers can cancel their contracts after five years, IF they pay higher shipping fees for a final two years. So TransCanada went from 10 years to 7 years, with really low prices for the first five years. Is it enough?…

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