TransCanada Sues Enbridge
TransCanada Corp. (NYSE: TRP) has filed for a lawsuit against Enbridge Inc. (NYSE: ENB) for canceling an agreement to co-operate on a natural gas pipleline located in the Greater Toronto Area. The claim was filed in the Ontario Superior Court of Justice and argues that TransCanada would face “irreparable harm” if Enbridge decides to end the agreement.
Enbridge argues that it broke the memorandum of understanding, because it would have resulted in the company breaking Candian law. Enbridge claims that TransCanada was offering toll discounts to certain customers, and didn’t offer full pipeline capacity. The Ontario Energy Board requires pipeline capacity to be offered on the market in an “open and non-discrimitory manner.”
TransCanada is seeking $4.5 billion in financial compensation, as well as a court order for Enbridge to continue operations.
Silent Gas Panic
A glut in North American natural gas since 2007 has caused a sharp downturn in Canadian gas exports over the past several years. Today, only one out of every four drilling rigs in Canada attempts to drill for natural gas, with an annual production decrease around 20%. But despite what seems like a dire situation, Canadian natural gas companies could be looking at a strong rebound. Canada is beginning to look to the west for natural gas resources, offering a potential breakout opportunity. For more about Western Canadian natural gas, click here.
