TransCanada reaches revised deal with Enbridge, Gaz Metro and Union Gas

TORONTO – Several Canadian pipeline companies have struck a deal that they say has resolved a dispute over how key infrastructure is shared in the Greater Toronto Area.

A joint announcement says that TransCanada (TSX:TRP) has reached a revised agreement with Enbridge (TSX:ENBZ), Gaz Metro and Union Gas, which operate major gas distribution systems in Ontario and Quebec.

The agreement includes a revised framework for tolls on TransCanada’s mainline and the proposed Kings North project in the Toronto area.

“I am very pleased that we were able to reach a mutually-agreeable solution that allows for the expansion of the Eastern portion of our system to meet the changing needs of Ontario and Quebec,” TransCanada’s President and CEO Russ Girling said in a statement.

“It takes significant time and effort to work out these agreements and I would like to thank the parties involved for the commitment to finding a workable solution.”

TransCanada said it is committed to providing natural gas pipeline capacity to meet all current and future needs of Eastern gas consumers.

“On behalf of the three local distribution companies, we are pleased to have reached an agreement in principle with TransCanada that will give consumers access to affordable and diverse gas supplies and long-term certainty on transportation tolls,” said Sophie Brochu, Gax Metro’s president and CEO.

“Access to affordable energy helps businesses be competitive, supports local economic growth and keeps costs low for families and businesses in Ontario and Quebec.”

Enbridge and TransCanada — two Calgary-based companies with extensive pipeline networks throughout Canada and the United States — have been at odds.

TransCanada went to the Ontario Superior Court of Justice in August to ask it force Enbridge to abide by the terms of a memorandum of understanding.

Enbridge had terminated the MOU in July, alleging TransCanada was doling out space of the pipeline that violated Ontario law. TransCanada countered that Enbridge had broken off the agreement “for its own convenience.”

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