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 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 ($893.26 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.
Canadian natural gas production has grown to record levels of nearly 18 billion cubic feet per day (bcf/d), but congestion on export pipelines has left gas 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 WP2023 project will help meet demand in key export markets in the U.S., including Washington, Oregon and California, and enhance market access for Canadian natural gas," the government said in a news release.
TC did not immediately respond to a request for comment.
($1 = 1.3434 Canadian dollars)
(Reporting by Nia Williams; editing by Edward Tobin)