We are here. The TransCanada Journey 1998

Transcription

We are here.
We are here.
The TransCanada Journey 1998–2010
in the responsible development and reliable and safe operation of
North American energy infrastructure.
Our network of wholly owned and affiliated pipelines taps
March 2007
TransCanada leads the North American pipeline industry and
the world in system integrity. And we’ve demonstrated an
exceptional record of system reliability and safety. We are proud
that millions of North Americans can depend on us for the
energy they need.
With increasing production from oil sands in Alberta, and growing
demand for secure, reliable sources of energy, TransCanada has
developed a major oil pipeline, complementing our natural gas
transmission business, drawing on our extensive pipelines experience
and offering an efficient way to maximize the value of our
current pipeline assets.
TransCanada is one of the continent’s largest providers of gas storage
and related services.
“Hal Kvisle is one of the unsung superstars of Canadian business ... . Having taken over a company reeling from a
wrenching merger in the late 1990s, he completed its turnaround and guided expansion in other capital-intensive
businesses, from nuclear (a major interest in Ontario’s
Bruce Power) and LNG to wind power and gas storage.”
— Gordon Pitts, THE Globe and Mail, April 2007
A growing independent power producer, TransCanada owns, controls
or is developing more than 11,700 megawatts of power generation.
TransCanada
450 – 1st Street SW, Calgary
Alberta, Canada T2P 5H1
www.transcanada.com
“...TransCanada has gone from being a boring regulated
utility to a company that’s one of the biggest infra-
structure players on the continent. Today, TransCanada
is all about two “P’s”—pipelines and power—with assets spread throughout the continent.”
— Deborah Yedlin, Calgary Herald, April 2010
Printed in Canada
Since TransCanada began operations in
1958, the company has built a rich
history. Its stories have been told over
the years through various books and
other publications. This book focuses
on the twelve years from 1998 to 2010, a
transformative era for the company that
has left it well-positioned for the future.
The Trans canada Journey 1998–2010
into virtually all major natural gas supply basins in North America.
“TransCanada and NOVA are corporate Siamese twins joined
at the hip in Alberta’s post-war energy boom.”
— Dick Haskayne, Northern Tigers: Building Ethical Canadian Corporate Champions,
We are here.
With more than 50 years experience, TransCanada is a leader
We are here.
The book chronicles some of the defining moments in the emergence
of a major independent energy infrastructure powerhouse, starting
with the TransCanada-NOVA merger in 1998, through the years of
post-merger restructuring and refocusing, the first steps of expansion
and growth, to the mega-projects and success of recent years.
The story in these pages is based on interviews with the people
who were directly involved in the events of the last twelve years.
In many cases, you’ll hear their recollections and experiences
told in their own words.
The book is dedicated to those who are or have been part of the
TransCanada family and who have helped draw the map of where
we’ve been, where we are, and where we are going.
We are here.
We are here.
March 2007
energy they need.
TransCanada
www.transcanada.com
Printed in Canada
We are here.
We are here.
We are here.
We are here.
March 2007
energy they need.
TransCanada
www.transcanada.com
Printed in Canada
We are here.
We are here.
We are here.
We are here.
March 2007
energy they need.
TransCanada
www.transcanada.com
Printed in Canada
We are here.
We are here.
We are here.
T h e T r a nsCanada Journey 1998–2010
We are here.
T h e T r a nsCanada Journey 1998–2010
Published in Canada by
Produced by TransCanada’s Internal Communications Department and TransCanada
Photos on opening pages are of a wind
TransCanada Corporation
Mapping, in collaboration with Forwords Communication Inc.
turbine and a ‘through-the-pipeline’
Dedicated to those who are or have been part of the TransCanada
a welding spark on Gas Transmission
family and who have helped draw the map of where we’ve been,
Northwest.
image of Keystone. Photo above is of
Copyright ©2010 by:
TransCanada Corporation
where we are, and where we are going.
First edition 2010
All rights reserved
No part of this book may be reproduced
Disclaimer: This book includes thoughts, ideas, views and opinions of various individuals. The views
in any form, or by any electronic,
and opinions contained in this book do not necessarily reflect the views and opinions of TransCanada
mechanical or other means, without
permission from the publisher.
Corporation. Any figures, numbers, charts, strategies, or data included is for illustrative purposes
only and should not be relied on for any analysis or other purposes. While efforts were made to be
accurate, TransCanada Corporation does not make any representation as to accuracy, or completeness
of any such information and will not be liable for any errors or omissions in this information or any
losses, injuries, or damages arising from its use.
ISBN 978-0-9866892-0-8
Printed and bound in Canada
We are here.
1 The start of something new.
2 Fix and focus.
Keystone Pipeline captures new opportunity
9 The call of the north.
Building the power business
8 Crude awakening.
The essential role of gas storage
7 Earth, wind, water, fire.
Pipeline expansion in the U.S. and Mexico
6 On tap.
The evolving Canadian pipeline business
5 Grow with the flow.
Leaders and leadership
4 Roots and branches.
Birth of a new strategy
3 At the helm.
1998 merger transforms business
Partnerships, promise, potential
10 Making it all happen.
The people who are TransCanada
Here we are.
Lat 50ºN, Long 113ºW
An emergency response
from nearby Vulcan,
exercise in the town of
Alberta, and Jim Hudson,
Champion, Alberta, in
TransCanada’s emergency
2005. (left to right)
site manager.
Dwayne Hill, fire chief
We are here.
Almost anywhere you go at TransCanada, you will find maps of North America on the
walls. For our people, these maps often tell fascinating stories, create passion, and generate
ideas for building something new.
Every colour-coded pipeline route, and every power plant marked by a lightning bolt, was
at one time “something new.” Together they make up an infrastructure suite that has been built
weld by weld, mile-by-mile, year-by-year, by thousands of people, over a span of six decades.
In his office in Calgary, Hal Kvisle is pointing out the huge scope and reach of the Keystone
Pipeline System, North America’s newest piece of critical oil energy infrastructure and the
company’s most recent feat of engineering.
“Every single one of these lines represents people,” says the now-retired CEO, who steered
the company through one of the biggest turnarounds in Canadian business history. He points
to an under-construction area he flew over just a few weeks earlier. “And each one connects
to another …”
Today, we are here … and here … and here … on three different coasts and hundreds of
points in between, across a continent that houses 529 million people. And our work is vital
to millions of those people, though they themselves may not know it.
Yet just a dozen years ago, our map looked very different and we could not have
contemplated a project on the grand scale of Keystone. Looking back at what the people of
TransCanada have accomplished over the past 12 years, there’s no question it’s been a dramatic
transformation in a very short time.
“The map is a diagram that shows where our influence is,” continues Hal. “The company is
so big, and the spread of our influence is so large.”
We Are Here The Transcanada JOurney 1998–2010
1
1998
With the TransCanada-NOVA merger in July 1998, TransCanada became the
major transporter of Canadian natural gas both within the Western Canadian
Sedimentary Basin (WCSB) and across the continent.
“For the first time in history, the NOVA (Alberta) system would
“I spent probably 40 weeks straight traveling to Boston trying to
become owned and operated and managed by the same group that
convince our partners to let us manage this plant,” says Alex Pourbaix,
was owning and operating the Mainline,” says Dennis McConaghy,
President, Energy and Oil Pipelines. “At that point going forward,
Executive Vice-President, Corporate Development.
we could say we were the operator of a state-of-the art power
As Dick Haskayne, TransCanada Board Chair from 1998 to 2005, says:
“It’s one big pipeline system, and, in the final analysis, you had to
plant. It gave us instant credibility and allowed us to go after other
opportunities. It was that deal that kick-started the power business.”
hammer them together.”
In the deregulated New England power market, the Ocean State
Power plant, which TransCanada had only recently begun managing,
was a key asset.
Natural Gas Pipelines
Power Generation
Natural Gas Storage
1
Canadian Mainline (1958)
1
Ocean State Power 1
2
Great Lakes (1968–partially owned)
(1990–partially owned)
3
TQM (1980–partially owned)
4
Northern Border (1982–partially owned)
5
Iroquois (1992–partially owned)
6
Tuscarora (1993–partially owned)
7
Alberta System (1998)
8
Foothills (1998–partially owned)
9
Alaska Pipeline Project (proposed)
10 Mackenzie Gas Pipeline Project (proposed by producers)
Some of the partially-owned entities are not operated by TransCanada.
2
CrossAlta (1994–partially owned)
10
9
7
1
8
1
3
2
1
5
1
4
6
Core assets that remain
part of the business today:
37,780 km (23,475 mi.) of
wholly-owned natural gas
pipelines
7,598 km (4,721 mi.) of partially
owned natural gas pipelines
400 MW of power generation
owned, controlled or in development
68 Bcf of underground natural
gas storage
3
2004
The company saw its niche in large-scale “blue chip” infrastructure. By 2004 the
power business had grown significantly through a combination of acquisitions
and greenfield construction projects.
“We decided that we should commit ourselves and go after the power
business in a big way. And there were lots of sceptics,” says Hal Kvisle,
CEO from 2001 to 2010. “So we said it shouldn’t be determined by where
our pipe goes, rather it should be determined by markets that we know
and that we understand really well. So the first run was Alberta, and the
second one was Ontario.”
In 2003 the company acquired partial ownership of Bruce Power,
Canada’s first privately owned nuclear plant. “Bruce is one of the deals
that really made the company,” says Alex Pourbaix, President, Energy
and Oil Pipelines. “It’s a challenging business, but it’s been a very good
business for us.”
With few opportunities to invest capital in Canadian gas transmission,
TransCanada turned its attention to connecting pipelines south of the
border. The acquisition of Gas Transmission Northwest (GTN) and the
North Baja system in 2004 were the first steps.
Power Generation
Natural Gas Storage
1
11 Portland (1999–partially owned)
1
Ocean State Power (1990)
1
2
Great Lakes (1968–partially owned)
12 GTN (2004)
2
Sundance A PPA (2000)
3
13 North Baja (2004)
3
Redwater (2001)
4
Northern Border (1982–partially owned) +
4
Carseland (2001)
5
5
Cancarb (2001)
6
Tuscarora (1993–partially owned) +
6
Sundance B PPA (2001)
7
7
Bruce Power (2003–partially owned)
8
Foothills (1998)
8
Bear Creek (2003)
9
9
MacKay River (2004)
10 Mackenzie Gas Pipeline project (proposed by producers)
PPA: Power Purchase Arrangement
+
Held in whole or in part through TC PipeLines, LP.
4
10 Grandview (2004)
10
9
7
9
8
2
6
3
1
8
4
5
10
1
3
12
1
2
11
7
5
1
4
6
41,000 km (25,476 mi.) of
wholly-owned natural gas
pipelines
13
5,700 MW of power generation
owned, controlled, or in
development
68 Bcf of underground natural gas storage
5
2007
After the acquisition of the ANR pipeline system in 2007, TransCanada was no
longer a “one-basin” company. Overnight, the acquisition added close to 17,000 km
(10,500 mi.) of pipeline to the system. This encompassed two large-diameter, highcapacity natural gas pipelines from the south to the Detroit-Chicago area and a web
of delivery lines serving Michigan, Wisconsin, Ohio, Illinois, and Indiana.
At the same time, the addition of ANR’s gas storage capacity made
“Cartier was our stepping stone into wind power,” says Corey Goulet,
TransCanada one of the largest gas storage providers on the continent.
who led the technical development and implementation. “And
Storage is an essential element associated with natural gas
transportation. It provides a means to put gas into a temporary
“warehouse” during periods of low demand when it’s not needed,
Bécancour was an important stepping stone for building large gas
fired power plants. It was the first two-on-one combined cycle plant
we built, and it was important that we did it well.”
and then pull it out during periods of high demand when it is.
By 2007, TransCanada’s power business had also diversified through
the acquisition of a run-of-river hydro system in New England,
the construction of its first large gas-fired power plant at Bécancour,
and the construction of its first wind farm in Québec.
Power Generation
Natural Gas Storage
1
1
1
2
Great Lakes (1968) +
12 GTN (2004)
2
2
Edson (2007)
3
13 North Baja (2004)
3
Redwater (2001)
3
ANR Gas Storage (2007)
4
Northern Border (1982–partially owned) +
14 Tamazunchale (2006)
4
Carseland (2001)
5
15 ANR (2007)
5
Cancarb (2001)
6
Tuscarora (1993) +
6
7
7
8
Foothills (1998)
8
Bear Creek (2003)
9
9
MacKay River (2004)
10 Grandview (2004)
11 TC Hydro (2005)
12 Sheerness PPA (2005)
+
6
13 Bécancour (2006)
14 Cartier Wind (2006–partially owned)
10
9
7
9
8
2
6
3
14
2
1 12
8
4
5
10
1
13
3
12
1
2
11
7
4
5
11
1
3
6
15
59,000 km (36,661 mi.) of 15
wholly owned natural gas pipelines
13
14
7
2010
With the construction of Keystone Pipeline, TransCanada has built one
of the largest oil delivery systems in North America. Oil from Alberta first reached
refineries in Wood River and Patoka, Illinois, via Keystone Pipeline in June 2010.
“If you look at the Midwest, they can’t get oil from supertankers—
Another example, Portlands Energy Centre (PEC), was one of
there’s no tidewater port in Nebraska,” says Robert Jones, Vice-
Canada’s biggest infrastructure projects of 2008–09. “On the Toronto
President, Keystone Pipelines. “So when you look at the refiners
waterfront, there’s an old coal-fired power plant that was the R.L.
that we’re supplying in the U.S. Midwest at Wood River and Patoka,
Hearn generating station built in the 50s, and shut down in the early
and the growing Western Canadian production of crude oil, mainly
80s. We thought it would be an ideal site to build a new gas-fired
from the oil sands, it’s a natural marriage.”
power plant, because of the centralized location, the fact that the
Growth in the power business has continued in a stepwise fashion
through both new construction and acquisition.
electrical infrastructure was there, combined with access to cooling
water and supply,” says Finn Greflund, Vice-President, Power
Generation and Development. “Several attempts were made to launch
“We’ve almost followed the recipe book for that perfectly,” says a generation project at the Hearn site. I worked on it for probably
Hal Kvisle, retired CEO. “It’s a perfect example of organic growth.
20 years before PEC came to fruition.”
We started out building $40 million projects, then $100 million
projects, then $500 million projects, and now the Bruce re-build
is a $2 billion project.”
Power Generation
1
1
2
Great Lakes (1968) +
12 GTN (2004)
2
15 Portlands Energy Centre
(2008–partially owned)
3
13 North Baja (2004) +
3
Redwater (2001)
16
Ravenswood (2008)
4
Northern Border (1982–partially owned)
Carseland (2001)
17
Kibby Wind (2009)
Cancarb (2001)
18
Halton Hills (under construction)
19
Coolidge (under construction)
Oakville (in development)
5
6
Tuscarora (1993)
+
+
14 Tamazunchale (2006)
15 ANR (2007)
16 Guadalajara (under construction)
4
5
6
7
17 Bison (under construction)
7
20
8
Foothills (1998)
Bear Creek (2003)
Natural Gas Storage
18 Groundbirch (under construction)
19 Horn River (in development)
8
9
9
MacKay River (2004)
Keystone Pipeline Project (2010)
A
B
+
C
Keystone Expansion (proposed project)
8
Oil Pipelines
Keystone Extension (under construction)
1
10 Grandview (2004)
2
Edson (2007)
11 TC Hydro (2005)
3
ANR Gas Storage (2007)
12 Sheerness PPA (2005)
13 Bécancour (2006)
14 Cartier Wind (2006–partially owned)
10
9
19
7
18
9
8
2
6
3
14
2
1 12
8
4
5
10
1
12
17
1
2
A
11
7
18 20
17
C
13
3
4
3
15
5
11
1
16
6
15
A
Assets today:
B
More than 60,000 km (37,500
C
mi.) of wholly owned natural gas
15
pipelines
13
19
3,500 km (2,174 mi.) of crude oil
pipeline in operation and a proposed
expansion of 2,700 km (1678 mi.)
14
16
9
finding our way
The first decade of the 21st century transformed TransCanada from a “one-basin” pipeline
company to a major energy infrastructure provider on the continent. Today, millions of
North Americans rely on us for the energy that fuels their homes and businesses.
The build-out of our assets looks clean, logical and obvious when laid out in a series of
maps. But real life is never that neat and the story could have gone a different way.
“There were people who thought we should just be a gas pipeline company,” recalls retired
CEO Hal Kvisle. “And if we didn’t have gas pipeline projects to invest in, we should just pay all
the money to shareholders. Notably, the people that are here on the executive team today did
not agree with that and we had greater ambition.”
The leadership team envisioned a company that would play a major role in delivering
energy to North America, not only in gas pipelines, but in other critical ways too. They also
envisioned sustainability, both in the environmental sense and in the economic sense. By
investing wisely, they saw that the company, its assets, and its people could grow and thrive
in the short term, and also survive for the long haul, leaving a legacy for future generations.
“Our vision was essentially unchanged for ten years,” says Hal. “We had a vision, and
we’ve stuck to it.”
In the pages of this book, you’ll find the story of that vision and the people who made it
real. You’ll experience some of the defining moments of the journey and the pivotal milestones
along the way. But we’re not standing still. Our journey continues to unfold. This is only
the beginning.
10
The start of something new.
1998 merger transforms the business
1
Chapter 1 1998 merger transforms the business
11
chapter 1
Corporate marriage of the century?
By 1998, after 40 years in business, TransCanada PipeLines (known
commonly as “TCPL”) had grown into a company with assets, people
and operations around the world. Across town in Calgary, NOVA
Corporation, a business with an equally steeped history, had just
announced plans to separate its petrochemical and natural gas
lines of business. This opened the doors for the two pipeline giants
to start talking. Described by the media of the day as somewhere
between a marriage made in heaven and a shotgun wedding, the
merger of TransCanada and NOVA created the fourth-largest gas
pipeline company in North America and a stand-alone spin-off, NOVA
Chemicals. Although, on paper, the arranged marriage was full
of promise, each company’s way of doing things was quite different
from the other, the result being a challenging time for the
employees who formed “MergeCo.”
January 26, 1998
George Watson (far right) then-CEO
of TransCanada, and Ted Newall,
then NOVA’s Vice Chairman and CEO,
announced the merger agreement and
answered questions at a joint press
conference. The March/April issue of
TransCanada’s Along the Line magazine
explained the proposal for employees.
George Watson, who became CEO
of the merged company, called it the
“deal of a lifetime.”
12
Lat 51°N, Long 114°W: June 29, 2010
When Marilyn Carpenter
sometimes along
is not at work with
Calgary’s scenic Bow
“some of the smartest
River. She’s training for
and hardest working
a marathon now—
people I know,” she can
her first.
often be found running,
14
remembering the merger
In 1998, Marilyn Carpenter was working
in community and Aboriginal relations for
NOVA Corporation in Calgary, a job she’d
held for three years. She remembers how she
felt when it was announced that her company
would merge with TransCanada PipeLines:
“It was an opportunity to bring together two world-class companies
and make something better. The business strategy made sense.”
Following the merger, Marilyn joined TransCanada’s new community
and Aboriginal relations group. “We were creating something new,
it was exciting,” she recalls.
But it quickly became obvious that the two companies brought
very different cultures through the new front door. One reporter
described the two groups as “Care Bears” vs. “G.I. Joes,” a characterization that stuck, whether you agreed with it or not. The tags
referred to the “softer,” people-focused culture of NOVA, and its
contrast to a more business-focused, hierarchical approach from
within the “old” TransCanada.
“I don’t think as a worker, I truly appreciated how difficult it is to
merge two companies,” remembers Marilyn. “For years, people asked
‘Which side did you come from?’”
Many factors contributed to the eventual integration of the two
cultures, and Marilyn recalls one example, a line rupture near the
community of Brookdale, Manitoba in 2002. “It was a negative
situation, but it pulled people together,” she says. “Who we were
as a new company really came through. It made us focus on
what’s important and move forward.”
Today, no one would dispute that the merger was the right thing
for both companies. Now a manager in TransCanada’s environment
group in Calgary, Marilyn says, “We really did end up better.”
15
Merger is big news
When the deal became final in July 1998, it was the largest energy
merger in Canadian history, and created the fourth-largest gas
pipeline company in North America.
On paper, the companies were equals. Both headquartered in
Calgary, NOVA had a virtual monopoly on natural gas transmission
in Alberta, while TransCanada’s Canadian Mainline reached from the
David Lazarowych, Calgary Herald
provincial boundaries across the country to Québec and southeast
to the Great Lakes region. The new company married the Canadian
Mainline with the NOVA Gas Transmission System (now known as the
Alberta System). Projections were for $16.8 billion in annual revenue,
and $100 million in savings on operating costs. The Financial Post
called it a “hot stock” with the headline “Analysts like new-look
TransCanada.”
The reality was a little different. Both companies had embarked on
1
growth strategies, and invested heavily in international opportunities
and commodity businesses, under the assumption that traditional
pipeline opportunities were declining. The combined debt that the
company was carrying, and the difficulties of managing smaller,
far-flung assets around the world, were concerns to the still-emerging
leadership team. Add to this the blending and restructuring of the
workforce from the two merged companies, and almost anyone who
went through that time remembers it as tumultuous and uncertain.
16
“RED LETTER DAY”
in downtown Calgary
shareholders, in keeping
On June 30, 1998,
are George Watson,
with the spartan fashion
shareholders of
then CEO (top left),
for which the company
both companies
and Gerald Maier,
is known, were treated
overwhelmingly
outgoing Board Chair
to coffee, pastries and
approved the
(1), who later received
ceremonial pens.”
TransCanada-NOVA
a standing ovation
merger. Addressing
in acknowledgment
400 TransCanada
of his leadership. The
shareholders at the
Calgary Herald reported
Westin Hotel ballroom
that “TransCanada
“In the realm of possible partners, NOVA was like beachfront property to TransCanada.
How often does beachfront property like that come up for sale? So it certainly looked
to be a very good fit for TransCanada, and a great opportunity.”
David Lazarowych, Calgary Herald
—Bob Reid, then-president of TransCanada Gas pipelines, now head of the Aboriginal Pipeline Group
At the Calgary
counterparts that same
reported that “After
Convention Centre,
day. Before the vote,
the meeting, NOVA
500 NOVA shareholders
Calgarians Wendy
shareholders—some with
gathered to cast their
Walker (left) and Peggy
tears in their eyes—filed
ballots—just a few
Ward sang O Canada
out of the meeting hall
blocks away from
to the beat of a native
to the calming strains of
their TransCanada
drum. The Calgary Herald
a Bach concerto.”
By the numbers
– At December 31, 1998
Book value of combined assets:
CAD$25.5 billion
Revenues (1998): CAD$17.2 billion
Debt: CAD$14.6 billion
Employees: 4,700
Number of countries with TransCanada
offices and assets: 15
Continents: 5
Net Income: CAD$575 million
18
1998 TransCanada at a glance
With assets from Bogotá
to Bangkok, and business
consulting toeholds from
Moscow to Montreal,
this map of the combined
TransCanada-NOVA ventures
from the company’s first postmerger annual report is a
busy one. Both organizations
had pursued aggressive
growth as global “energy
services” companies.
19
“There is still a great deal of work ahead of us to make this merger the success
it has every potential to be. For the moment, though, I invite you to savour the
accomplishment of merging these great companies.”
—THen-CEO GEORGE WATSON in a memo to all employees July 6, 1998,
the first business day after the merger
Stock exchange
Each TransCanada common
TransCanada shares
Each NOVA share was
share yielded one “new”
outstanding in July 1998:
exchanged for 0.52 of a
TransCanada share + 0.2 of
459.1 million. (At end of
“new” TransCanada share
a NOVA Chemicals Corp.
Q1 2010:687.1 million.)
valued at C$26.95.
common share valued at
C$27.85.
20
1
2
3
“It was a lot of change, people worrying about their jobs,
will they have a job, or will the job they have be a good one,
new co-workers, new bosses. That puts stress on people.”
Memories of NOVA:
Husband and wife
employees John
McIntyre and Rhonda
Trundle (1) outside
the former Calgary
head office. Kelvin
—Steve Emond, then-co-director, sales and service
Davies (2) on the site
“My own memory was coming out of the NOVA building, and there was a big sign in the
front, ‘NOVA Corporation,’ and it was kind of ironic, because the day I was walking out
with my last armful of things, and feeling kind of sad, they were taking the sign down, and
it was very emotional, there were a couple of tears… People just loved that company, but
what is a company? It’s the people.”
—Wendy Hanrahan, then-Director, Transmission Accounting
of a compressor station
construction project in
Turner Valley, Alberta.
Marj Johnson and Sue
Pruliere (3) outside the
former NOVA building
in downtown Sarnia,
Ontario. All photos from
NOVA’s 40th anniversary
“The immediate post-merger period was—for me—a time when I was very cautious as a leader. I felt
like I was walking on eggshells a lot of the time, trying to do my job while being sensitive to the
cultural differences, one of which was the differences in people’s expectations for leadership.”
commemorative
publication, 1993.
—Max Feldman, then-vice-president, business operations and transportation marketing
“I was a member of the so-called “culture club.” Through a defined process, we held focus
groups where we explored the culture of the two organizations, and through that, we were able
to really delve into the differences between the two organizations.”
—Corey Goulet, then-leader of the Songo Songo project
21
CHAPTER 1 Where we’ve been
July 1957 June 1998
April 1999
First gas flowed on Alberta system
Merger approved by shareholders
First AGM of the new TransCanada
With about 190 km (120 mi.) of
Shareholders of TransCanada PipeLines
Company reported disappointing
pipeline, the system was built and
and NOVA Corporation overwhelmingly
post-merger results.
operated by The Alberta Gas Trunk
approved the $14-billion deal; NOVA
Line Company, which later became
Chemicals spun off as separate entity.
NOVA Gas Transmission Ltd.
April 1999
New brand and logo
July 1998 TransCanada retired its old
OctOBER 1958
New shares start trading
“hamburger” logo and introduced
Last weld on TransCanada’s
Common shares of the new
its new “one-company” brand.
Canadian Mainline
TransCanada began trading under
3,500 km (2,190 mi.) of pipe, stretching
the symbol TRP. Vision was to be
July 1999
from the Alberta-Saskatchewan border
“the pre-eminent provider of high
Doug Baldwin appointed
to Toronto and Montreal.
value-added integrated energy
interim CEO
solutions, worldwide.”
One year after merger, share price
JanUARY 1998
was down almost 40%; CEO George
Merger announced
Watson departed and the Board
TransCanada-NOVA union tagged
appointed Doug Baldwin to lead
as “marriage made in heaven”;
the floundering company.
it’s the largest non-financial merger
in Canadian history.
“This was a huge integration, there were merger teams set up to try to figure out
how to do it. It was structured as a merger of equals, and that’s got its own unique
challenges, because there’s confusion about who’s really the boss.”
—Garnet Scaman, Canadian pipeline operations
22
Fix and focus.
2
Chapter 2 Birth of a new strategy
23
chapter 2
New leaders, new plan, tough choices,
good timing.
A year after the TransCanada–NOVA merger, the company was not
performing as expected and was faltering on many fronts. A new
direction was clearly needed.
In July 1999, retired Imperial Oil executive Doug Baldwin was
appointed Chief Executive Officer, with a mandate to “fix and focus.”
He and his leadership team saw no option but to divest the
company’s international, gas marketing, and non-core assets.
They made the difficult decision to reduce TransCanada’s dividend
payments as an additional austerity measure. With these steps,
the company slowly emerged from troubled waters. In 2001, Doug
retired (again) and passed the reins to Hal Kvisle, who held the
post of CEO for nine years.
Doug Baldwin, CEO 1999–2001
Doug recalls the company had “an
awful lot of moving parts and we really
didn’t understand the pieces very well.
We had investments in Argentina, in
Chile, in the North Sea; we had a liquids
extraction plant in Louisiana; we had
the midstream extraction facilities in
Alberta. We needed to understand
what all these assets were contributing
to the bottom line.”
24
25
April 5, 2000
Russ Girling (left) and
Doug Baldwin, explain
the new strategy to
shareholders at the
company’s annual
general meeting.
26
Taking the hard road
“We were in pretty dire trouble,” recalls Russ Girling,
who, in 1999, was TransCanada’s newly appointed Chief
Financial Officer. Earnings were down, the stock price
was falling, growth areas of the business were heavily
funded with debt. “We needed to do something.”
After several months of analysis and debate among the leadership team, Doug Baldwin,
interim CEO, announced the company’s new “fix and focus” strategy.
Many employees were disappointed, but not surprised, by the plan. The company would
scale back, sell non-core assets, and focus on its strongest North American businesses.
“Given our core business was pipelines, we kept that, and we kept our fledgling power
business, because it was very profitable at the time,” explains Russ. “That was the core,
which we thought we could build around.”
At the same time, Doug announced the news that the company’s prized dividend would
be reduced almost 30% from $1.12 to $0.80 per share.
A month or so later, Doug and Russ took a winter road trip to meet with the company’s
biggest investors, explain the new strategy, and defend the unpopular dividend cut.
“We were actually escorted out of one office,” remembers Doug more than a decade later.
“It was tough going, but we explained we felt it was our
last resort,” says Russ. “We took heat from the rating
agencies, and were called names on blogs and websites.
We needed to build their confidence back that we
were doing the right thing, and that this was for the
betterment of the company in the long run.”
Looking back, Dick Haskayne, who was Board Chair at
the time, offers perspective: “I’ve never taken so much
personal flack over anything in my career,” he says.
“But it was absolutely the right thing to do.”
Dick Haskayne
27
“I remember meeting as a management team, and debating what we were going to
recommend to the Board: Are we going to sell international or are we going to sell
midstream? It was actually Sarah [Raiss] who said, ‘I think we’d better sell them all.’”
—Doug Baldwin, CEO, 1999-2001
DIVESTITURE PLAN
“I was hired in 1999 to run TransCanada’s non-regulated businesses,”
As for the timing, TransCanada
recalls Hal Kvisle. “Within three months we knew that most of what
“hit the wall” about 18 months
I was hired to run had to be sold.”
before the giant American energy
“There really were no options,” recalls Russ Girling. “It’s the same
as anybody who gets themselves into too much debt. You cut up
your credit cards and you stop going out for dinner every night.
Hopefully you still have a job. In our case, we still had our regulated
businesses—which were throwing off cash—so we could keep the
lights on and pay the bills. But we had to sell off all the extra houses
and cars and pay down our credit cards.
company Enron filed for bankruptcy
in December 2001, causing crisis and
financial hardship both inside the
industry and out. In fact, Russ recalls
the terms of the sale of TransCanada’s
gas trading and marketing business
being finalized in the wee hours of
a Sunday night, just days before the
“It was rough, but we had to decide what businesses we were going
Enron accounting fraud scandal became
to keep, and which ones we were going to sell. I think we sold some
public on a now-infamous Thursday
things that we didn’t want to sell, but we had no choice, because
in October.
it was imperative that we get our financial flexibility back. We never
want to be in that position ever, ever again.”
“We were in the marketplace selling assets when everybody else
was still in the euphoria,” says Russ. “It was a heady time—you could
Before succeeding Doug as CEO, Hal helped manage the asset sale
borrow more money than the company was worth. But we stayed
process throughout 2000 and 2001. “It was actually something that
away from that, which allowed us to get through this last global
I’d done a lot of in my career. There were people around me saying
financial crisis unscathed.”
‘that’s the wrong way to do it,’ but I knew, because I’d done it
before. And we got it done. So that was a defining moment for me.
That’s where we saved the company in many ways from getting
taken over by somebody else.”
“When you hit the wall, there is only one way to turn.”
—Russ Girling, then-CFO
28
Hal Kvisle
1
2
“From an employee’s perspective it was very emotional,” remembers
“We were in a bunch of businesses that we thought could carry
Jill Gilhuly of Human Resources (1). “We had all these people in
a lot of debt, but it became clear that was not the case,” says Don
the assets we were selling off. How do you decide who stays and
Marchand (2), who was Treasurer in 1999 and is Chief Financial
who goes? Nobody’s job was guaranteed and we wanted it to be
Officer today. “Though we felt vulnerable to a takeover at that time,
fair—why should somebody who works in corporate be chosen over
the value was there if we could just get our financial house back in
somebody who works in international? We had three weeks to put
order. The financing plan that was put together was credible and
together a plan. We called it ‘resourcing during divestiture.’ Those
supported by rating agencies. Even through the turbulence, we didn’t
of us on the design team had to stand up and explain this to groups
lose our ‘A’ grade credit. Our plan was well-crafted, well-executed,
of employees—you could feel the anger and the emotion.”
and we were very fortunate on timing.”
“You’ve already got a merger that hasn’t gelled, you’re now having to divest,
and you’re having to downsize. So you can imagine the pain of all these
people—they don’t know what’s happening, they see all the politics going on,
it’s a scary time for them.”
—Sarah Raiss, Executive Vice-President, Corporate Services
29
“For a man without a map, any path will do, because he really doesn’t
have a destination in mind. Operational Excellence gave us a map.”
—Steve Schock, VICE-PRESIDENT, PROJECT MANAGEMENT
COMPETITION DRIVES EFFICIENCY
“At the time you had two large utility-type companies, with limited
“It became a way of rallying and improving just about every aspect of
competition, and efficiency maybe wasn’t their forte,” says Jim Baggs,
what we do,” says Jim. “We would be more efficient, more effective,
who was then-Manager of Maintenance Practices and Procedures.
and improve safety.”
“When the merger was announced, we said we would save a hundred
million dollars in operating costs. That was one of the reasons why
shippers would actually approve it.”
To cite but a few examples: gas control was centralized from eight
locations down to one; a new approach to field maintenance enabled
the company to work through a single contractor rather than dealing
By 2000, the leadership team realized that gas volume and workload
directly with 1,500 different subcontractors; new emissions-tracking
reductions required downsizing of at least 50% of the field workforce
technology was introduced; and online electronic billing was made
across Canada, recalls Jim, now Vice-President, Operations and
available for pipeline customers.
Engineering. “And that was probably the most stressful thing that
I had to go through. My emotions were in rough shape because
I knew a lot of these people.”
It was Doug Baldwin who began the mantra of “operational
The drive for operational excellence brought a new level of discipline
and helped the company grow revenues faster than expenses. By the
end of 2003, the company had annual cash flow of $1.8 billion and
was poised for new growth opportunities.
excellence” that same year. Customers had increasing choices and
TransCanada could not afford to deliver anything but “low-cost,
reliable, hassle-free, and responsive service.”
1
(1) The 2000 annual
report was symbolically
pared down. The “Better,
faster, cheaper” tagline
proved memorable
and remains part
of TransCanada’s
lexicon today.
(2) 2004 saw the
launch of “OE2”—the
Operational Excellence
in Operations and
Engineering Project.
This OE2 cube puzzle
promoted the project’s
goals to employees.
30
2
31
CHAPTER 2 Where We’ve Been
April 2001
July 1999 July 2000
Doug Baldwin
New vision
Better, faster, cheaper
Appointed interim CEO.
TransCanada stated its vision to be
2000 annual report featured the tagline
“the most extraordinary turnaround
“better, faster, cheaper” and significantly
DecEMBER 1999 story in Canadian history” by 2005.
Quarterly dividend was raised by 12.5%.
New strategy approved,
dividend cut
restored and strengthened financials.
AugUST 2000
Strategy of refocusing on core
Power asset acquisition
June 2001
Financial performance recognized
pipeline and power businesses
Sundance A Power Purchase
approved by the Board. TransCanada
Arrangement (PPA) acquired
Barron’s Top 25 Financial Rankings
cut its dividend by almost 30% and
(560 MW).
included TransCanada at No. 21 out
of 500 companies based on financial
announced plans to sell non-core
assets including international and
DecEMBER 2000
midstream businesses.
Divestiture program well underway
FebRUARY 2000
more than $2 billion of assets,
Final exit from gas marketing
Share price declines
including $1 billion in midstream, and
Natural gas marketing and trading
international assets in Tanzania, the
business sold.
By year-end, the company had sold
Share price reached low of $9.80.
performance.
OctOBER 2001
Netherlands, Mexico and Venezuela.
March 2000
New focus on operational excellence
Total projected sales for all divestitures
estimated at $3.45 billion.
NovEMBER 2001
Roadshow promotes strategies
Hal Kvisle embarked on first media
“Operational Excellence” first explained
in the Source employee magazine.
March 2001
and investor relations tour to share the
For some, it was a painful cost-reduction
Hal Kvisle
company’s key strategies for growth.
and restructuring exercise.
Named President and CEO.
“TransCanada is a company that always has some big challenges
and big opportunities in front of it. There’s never been a dull moment.”
—Steve Pohlod, Commercial East, Canadian pipelines
32
At the helm.
3
Chapter 3 Leaders and leadership
33
chapter 3
Setting direction. Staying the course.
Doing the right thing.
When Russ Girling took the post of Chief Executive Officer in July
TransCanada’s extended leadership team now numbers more
2010, he became the third in a line of TransCanada CEOs working
than 600 people. They guide a workforce of over 4,200 (plus
towards a single vision.
hundreds of contractors), many dispersed in remote locations across
Russ will further the work Hal Kvisle started in 2001. Hal, in turn,
continued the work that Doug Baldwin began in 1999. Together
the three men have presided over a remarkable turnaround
that the Calgary Herald has called “an era of rebirth, redirection
and growth.”
the continent. “The company is so big and we do it all with so few
people,” reflects Hal. “I don’t know any other company that has
$45 billion of assets and only 4,200 people. So the people that
you have need to be really good; they’re each responsible for a very
large asset value. They tend to be very resilient, self-sufficient
and capable people.”
But leadership is not just about the top job. TransCanada’s success
story would not have been possible without the commitment of
leaders at all levels of the company—from the Board of Directors,
to the executive team, to those on the front lines.
LAT 51°N, LONG 114°W: April 30, 2010
Russ Girling and Hal Kvisle have worked
closely with each other for more than
a decade. Here, they share the stage
at the final annual general meeting
of Hal’s tenure as CEO.
34
LAT 52°N, LONG 113°W: Hal Kvisle, 2008
“I did not grow up in a
hard, and get the best
wealthy family, but my
job experience you can.
parents were committed
That advice came from
to higher education for
an older friend, an
all their children. I was
engineer in the oil
fortunate to get some
refining business, and it’s
good advice—go to
perhaps the best advice
engineering school, work
I’ve ever received.”
36
REFLECTIONS OF A CEO
He’s fascinated by maps of all kinds, and keeps many
pipeline schematics of North America handy. He’s
covered almost every inch of Alberta in a car, and knows
the TransCanada system like the back of his hand.
He’s criss-crossed the continent countless times visiting TransCanada’s construction sites
and facilities, and talking with the people on the ground. In his office, he’s got a sample
piece of 42-inch pipe with an experimental half-inch fibreglass wrap on the outside.
Once an engineer, always an engineer.
His ability to understand, explain, and discuss the technical details is renowned; as is his
remarkable talent for communicating and relating to people of all walks of life.
Hal Kvisle has said he hopes to be remembered for just two things: the right strategy and
good decision-making.
“The really pivotal moments that I would reflect back on are where we made very
conscious, thorough, and high-quality decisions,” he said, shortly before his retirement from
the CEO post at the end of June 2010. “I’m a bit obsessive about doing what it takes
to make sure that the organization makes the right decision on very difficult, complicated
matters. One wrong decision made at three o’clock on a Thursday afternoon can cost the
company billions of dollars.”
On the strategy point, he says he’s proud of the “resolve, tenacity, and courage” TransCanada’s
leadership has shown over the past ten years. “We went from a company where a big
investment program was $600 million a year to a company that’s capable of investing
$6 billion a year, and doing it wisely and getting a good result. This is tough, tough stuff.”
What have been the hardest decisions he’s faced? He cites the decision to get out of gas
marketing in 2001, several reorganizations and “people” decisions, and staying the course
in the face of external criticism.
“When you’ve run the numbers and figured it out, but the stock market doesn’t believe
you, the credit agencies want to downgrade your debt, or the people in the newspapers are
writing stories saying that TransCanada has gone crazy…that’s when it’s tough being
the CEO. Over the past three years, we’ve been criticized externally, we’ve been questioned
by our Board. We’ve agonized over whether we are doing the right thing by going after
the full Keystone project. If this had been a $12 billion oil sands development project, I would
have said no, we can’t manage this. But this is $12 billion of putting pipe in the ground—
and the people in this company know how to do that better than anyone in the world.
So we did it.”
37
REFLECTIONS ON HAL AS CEO
“If you walked into a diner in small-town
Alberta, you would think he was a local.
You would never guess that he was the
CEO of a major corporation, because
he’s so unassuming and low-key.”
—JANNA LABERGE, Hal’s executive assistant
of eleven years
“A great role model for a young engineer like me.”
—JESSE BAJNOK, Keystone Pipeline, Houston
“He is the best communicator I have
ever known.”
—SARAH RAISS, EXECUTIVE VICE-PRESIDENT,
Corporate Services
Janna Laberge 2010
“He has an unbelievable ability to listen and talk
to and reach agreements with other people.
He’s a superb dealmaker, strategist. That’s
what I admire. And he’s a very nice man.”
—DOUG BALDWIN, Hal’s predecessor as CEO
“He has made this a company I am truly proud to be a part of every day.”
—CHARLEEN PARCHEWSKY, Treasury, Calgary
“He focused on the health and safety of all our staff without hesitation. The ability to
assure the public on our environmental commitment was never compromised.”
—THOMAS McLEAN, Energy Project Implementation, Arizona
38
HAL KVISLE – BY THE NUMBERS
Born: October 20, 1952, Innisfail, Alberta
University degrees: 2 (B.Eng and MBA)
Years in the energy business: 35
On retirement: Hal says
he is looking forward
Years with TransCanada: 11
to fixing fences on his
ranch, and “changing
Years as CEO: 9 (starting in 2001)
tracks,” to quote
Company’s net income in his first year as CEO:
one of his favourite
$670 million
artists, Canadian
country bluesman
In 2009: $1.374 billion
Fred Eaglesmith.
Increase in TRP share price during years as CEO:
94% (from $18.40 to $35.61)
Personal leadership and management awards:
6 (including Canada’s CEO of the Year in 2008)
Board positions held as of July 2010:
4 (3 corporate and 1 not-for-profit)
Retired: June 30, 2010
“He is as comfortable pounding fence
posts and dealing with the guy driving
the tractor as he is dealing with the
Prime Minister of Canada.”
—BARRY JACKSON, chairman of the board
“Hal was a leader from the start because of the
way he acts. A lot of leaders lose track of their base,
but Hal really hasn’t changed.”
—DICK HASKAYNE, past board CHAIR
Corey Goulet explains
to Hal how the industrial
gas turbines work at
Bécancour, 2005.
39
Back in the day...
July 1998: Energy Transmission Leadership Team
Upon its formation, the
They envisioned an
Back row (left to right):
Front row: Bruce
Transmission Leadership
efficient organization
John Walker, Brian
McNaught, Janet Love,
Team declared that they
that would “blend the
McNulty, Greg Fisher,
Shelagh Ricketts, Eric
would meet the market
best from our corporate
Ron Turner, Paul Jeffrey,
Shelton, Max Feldman.
realities of continental
legacies and styles.”
Bob Reid, Barbara Tate,
competition and con
tinuous change in the
industry “head on.”
John Carruthers.
2001: Executive leadership team
•Al Bellstedt (1), Executive Vice-President (EVP), Law and General
Counsel. Al retired in 2007.
•Alex Pourbaix (2), then-EVP, Power Development—one of the
initial proponents of developing a substantial power business, Alex
3
2
continues to play a key role on today’s Executive Leadership Team
(ELT), as President, Energy and Oil Pipelines.
•Sarah Raiss (3), EVP, Corporate Services—recruited in 1999 as a merger
integration specialist, Sarah’s role was expanded in 2001.
1
•Russ Girling (4), then-EVP and Chief Financial Officer—after 16 years
with the company, Russ was named CEO in 2010.
•Hal Kvisle (5)—shown here shortly after he became CEO in May 2001.
•Ron Turner (6), then-EVP, Operations and Engineering—known for
his work in the international pipeline business at TransCanada prior to
its divestiture, Ron retired in 2006.
•Dennis McConaghy (7), then-EVP, Gas Development—part of the
original team who determined how to refocus the company in 1999,
Dennis remains on the ELT, leading the development of major pipe
and power infrastructure initiatives.
4
5
6
7
June 1998: Merger Transition
Working Team
Their task: to help
and then to communicate
develop the transition
that across the organiza-
process for the pipeline
tion,” recalls Russ Hantho,
business, as its various
who led the team.
components were integrated into a single
new energy transmission
business unit post-merger.
The team was composed
of a cross-section of
people from both NOVA
and TransCanada. “On
the part of the whole
team, there was open-
Back row (left to right):
Fred Jacques, Bill Ediger,
Russ Hantho, Lynn
Sveinson, Doug Goodwin,
Shelagh Ricketts,
Terry Clarke, Charles
Vermeeren, Allan Amey,
Steve Emond and
Dave McClenaghan.
mindedness, a willingness
Front row: Alex Wile,
to listen and learn from
Marie Robinson, Rick
each other, and really
Schmidt, Gerry Gibson,
take the best forward,
Carolyn Craig and
Art Smith.
41
A seat at the table
Hal Kvisle, former CEO, on leadership
“We’ve given our leaders permission to be visionary, but we also
insist that we be respectful of diligent, detailed work, hard, factual
knowledge, and expertise. How do you know all these things that
your competitors don’t know? You do it by people doing a lot
of detailed work and having conversations within TransCanada, that
I think generally are at a higher and more sophisticated level than
what goes on industry-wide.”
LAT 44°N, LONG 97°W: June 22, 2010
Some of TransCanada’s extended
Back table (left to right):
leadership team gathered for an offsite
Wendy Hanrahan, Vice-President,
session in downtown Calgary.
Human Resources; Paul Miller, Vice-
Left table (left to right): Karl
Johannson, Senior Vice-President,
Canadian Power; Lee Hobbs, Senior
Vice-President and General Manager,
U.S. Pipelines; Steve Schock, VicePresident, Project Management;
Max Feldman, Senior Vice-President,
President, Oil Pipelines; David Moneta,
Vice-President, Investor Relations and
Communications; Steve Clark,
Vice-President, Commercial West,
Canadian and Eastern U.S. Pipelines;
Gary Charette, Vice-President, U.S.
Pipelines Commercial Operations.
Canadian and Eastern U.S. Pipelines;
Right table (left to right):
Kristine Delkus, Deputy General
Terry Bennett, Vice-President, Power
Counsel, Pipelines and Regulatory
Development; Vern Meier, Vice-
Affairs; Jim Baggs, Vice-President,
President, U.S. Pipelines Field
Operations and Engineering.
Operations; Rick Coutts, Vice-President,
Information Services; Brandon
Anderson, Vice-President, Gas Storage;
Rick Gateman, Vice-President,
Northern Development; Steve Pohlod,
Vice-President, Commercial East,
Canadian Pipelines.
42
“I think it’s one of the best leadership teams around; certainly
at the top end of the spectrum of talent and capability.
And it goes quite deep in the organization—the knowledge
base and capability is just outstanding… . When you have
a management team with this kind of capability, it makes it
very easy for the Board.”
—Barry Jackson, board chair
43
LIVING OUR VALUES
Dick Haskayne, past Board Chair, on integrity
“When you leave this planet, the only
thing you leave behind, or take with you,
depending on how you measure it, is your
reputation, and if you mess that up, it’s
awfully hard to get back. So therefore, if
your objective is to make a lot of money,
that’s fine, but do it in some ethical way.”
Max Feldman, Senior Vice-President,
Canadian and Eastern U.S. Pipelines, on
integrity
“We need buy-in from many of our
customers to be successful in achieving our
own goals. We’ve got to recognize that for
them to understand and support us they
need a lot of information, they need to hear
the straight goods from us, and they need
to understand it.”
Dick Haskayne and Rhondda
Grant, Vice-President and
Corporate Secretary, at the
AGM 2000.
“The people who live and
breathe these values, they
will rise to the top, they
will be the leaders of this
organization.”
—Russ Girling, CEO
44
“The people at the top of the company
inspire other leaders to model the same
kind of behaviour.”
—KIM McGILLIVRAY, Human Resources, leadership
program developer and facilitator
Don Wishart (1), Executive Vice-President, Operations and Major
Projects, on responsibility
“We serve millions of people in terms of providing them with the
electricity and with the natural gas they need to live a comfortable and
safe life. We take the responsibility very seriously. It’s our job.”
1
2
Lee Hobbs, Senior Vice-President and General Manager, U.S. Pipelines,
on responsibility
“When you’re in something for the long-term you act in a way that
says ‘I’m here for a long time and I have to live in this community, I have
to live with what I say, I have to live with what I do.’”
Sean McMaster (2), Executive Vice-President, Corporate and General
Counsel, on collaboration
“I’m continuously amazed at when there’s an issue or a problem,
all you have to do is ask a few people and there’s such a great depth of
knowledge and talent in the company that somebody’s got an answer
to just about anything.”
Hal Kvisle, former CEO, on innovation
“We lead the industry in terms of buying steel pipe, we lead the
industry in terms of the welding technology. How do you weld pipes
together out in the field using automatic computer-controlled welding?
TransCanada and the welding machine companies and the pipe suppliers
jointly developed all that stuff over the past 25 years. The only constant
you find in leading-edge pipeline technology is TransCanada.”
Sarah Raiss (3), Executive Vice-President, Corporate Services, on
collaboration
“I’ve worked with, and for, a lot of companies in my career, and the
level of collaboration you get here is unique. It’s what sets us apart.”
3
July 2009
July 1999 November 2003
Doug Baldwin
Sarah Raiss
Russ Girling
Appointed interim CEO.
Named to Canada’s most powerful
Appointed Chief Operating Officer.
March 2001
Network and the Richard Ivey School of
December 2009
Hal Kvisle
Business; she was subsequently named to
Sean McMaster
Named as new President and CEO.
the list four more times. Sarah received
Received appointment to Alberta
this recognition during her tenure as
Queens Counsel. The award recognizes
women list by Women’s Executive
September 2001
EVP Corporate Services.
Board of Directors
members of the Alberta bar for
outstanding expertise, work and
Named one of the top 25 boards in
February 2005
Canada by Canadian Business Magazine
Barry Jackson
(2001–2003) under leadership of
Announced as TransCanada Board Chair.
contributions in public life.
May 2010
Hal Kvisle
Dick Haskayne.
September 2008
Received Distinguished Business Leader
Hal Kvisle
Award from Haskayne School of Business
Alex Pourbaix
Received Canada’s Outstanding CEO
and Calgary Chamber of Commerce.
Named one of Canada’s Top 40 Under 40
of the Year award.
April 2002
July 2010
by the Globe and Mail (Alex was then
in the role of Executive Vice-President
November 2008
Hal Kvisle retires
(EVP), Power Development.
Russ Girling
Russ Girling appointed President
Received Management Alumni
and CEO; also appointed to the Board
Excellence Award from the University
of Directors.
of Calgary’s Haskayne School of
Business.
“It’s a company that has a can-do attitude, looks at challenges
and works together and pulls together to meet those challenges.”
—Brian Blair, Mackenzie development
46
Roots and branches.
4
CHAPTER 4 The evolving Canadian pipeline business
47
chapter 4
Celebrating 50 years. Expanding the
Alberta System. Tapping into shale gas.
It was once dubbed a “sleepy pipeline business” by local and
national media. But today, it’s far from that. More than 50 years since
it started operating, TransCanada’s Canadian natural gas pipeline
business continues to evolve and remains a critical part of the North
American pipeline network. In the 90s, a large amount of capital
was spent on both the Canadian Mainline and the Alberta System,
as expansions to both systems occurred to meet market demand.
More recently, TransCanada expanded the Alberta System with
its North Central Corridor project. As well, recent changes in both
jurisdiction and technology make shale gas supplies in British
Columbia and Alberta very promising. TransCanada will be right
there with two new pipeline projects in the works.
Lat 49°N, Long 82°W: October 10, 1958
The building of the original
Canadian Mainline changed the
face of Canada in many ways,
bringing gas to the East and providing
economic and other benefits to
hundreds of communities across the
country. Pictured here is the “last
weld” that marked the completion of
the original pipeline at Kapuskasing,
Ontario, in 1958.
48
We Are Here The Transcanada Journey 1998–2010
49
Lat 51°N, Long 114°W: June 18, 2010
Thirty years ago, Kay
later that man had a
Coad left her job as a
new job at TransCanada.
small-town lifeguard,
Three decades on, Kay
and was working in
works in the customer
TransCanada’s Calgary
call centre in Calgary, a
Human Resources
central hub for pipeline
department, when a
customer calls 15 hours a
man wandered in on a
day, seven days a week.
hot summer’s afternoon
That man, Steve Emond,
wondering about job
is now a vice president
opportunities. Kay got
with the company, and
his resumé into the right
Kay’s senior leader.
hands, and two hours
50
We Are Here The TransCanada Journey 1998–2010
Listening to customers
“At the end of the day, it’s about the customer, and it
doesn’t hurt to remind ourselves that we would not be here
if we did not have customers. It’s as simple as that.”
—Kay Coad, Canadian and Eastern U.S. Pipelines, Commercial Operations
“Another key thing for me, with customers and in life, is, don’t be
afraid to say if you’ve messed up. Like this guy called me, and I told him
I would search something out for him. The next day came, but somehow
I got busy, and I completely forgot. So he calls me to find out what’s
up? And I could have made an excuse, but instead, I just admitted I’d
forgotten, and that I’d be on it as soon as I hung up the phone. And
then he laughed, and I had an answer for him within a couple hours,
and I know that builds trust. Don’t try to snow somebody. Don’t make
up excuses. Take ownership, and be honest. That’s huge. Don’t be
afraid to say you don’t know something either. I’d like to be a lot
smarter, but a lot of times, I just don’t know, and I’m comfortable
with that. My experience is that you’re not the only one that doesn’t
know. But always take the time to find out and get the answers.
I guess it’s the good old golden rule: What would you want if it was
you on the other end of the meeting or the phone call?”
What we hear
An annual survey is conducted by lpsos-Reid to assess the quality of our
customer relationships in our Canadian gas pipelines business. Over
the past five years, results have indicated continued high performance
particularly in the areas of transactional systems, call centre, and our
overall customer service. Satisfaction percentages ranked between
80–98% across the three categories. These results are extraordinary
and are unsurpassed within the lpsos-Reid customer base.
“It’s important for us to be able to measure how well we’re meeting
customers’ expectations. The survey is an excellent tool for gauging
how well we’re doing,” says Steve Emond, Vice-President, System
Design and Commercial Operations. “We really dig into the survey
results and wherever we see areas where we may be falling short,
we’ll build specific objectives into our business plans to make
improvements in those areas.”
51
celebrating 50 years
When it was completed in October 1958, it was the longest pipeline
in the world. With good care and maintenance, TransCanada’s
Canadian Mainline is still going strong more than 50 years later. The
50th anniversary of its completion, in 2008, was a chance to celebrate,
and look back at the incredible achievement in technology and
engineering. That expertise combined with human perseverance is
still at work today on many TransCanada projects.
The Canadian Mainline, of course, connected to the original Alberta
System, which brought gas from the Western Canada Sedimentary
Basin as far as the Alberta border. It started operating in 1957 with
190 km (118 mi.) of pipe in southeastern Alberta, built by the Alberta
Gas Trunk Line Company Limited.
To commemorate the 50th anniversary of the completion of the
Canadian Mainline, Canada Post issued a special stamp. Designed by
Banff, Alberta, artist Tim Nokes, the stamp depicts a welder joining
pieces of the pipeline, to represent the more than 5,000 people who
worked on the historic project. The confetti-like sparks coming off
the pipeline evoke another aspect of the celebration. The stamp
was unveiled to almost 1,800 employees by then-CEO Hal Kvisle and
second generation TransCanada employee Roger Lemieux at the
Employee Forum in May 2008.
The Last Weld
Construction on the
Canadian Mainline’s
western leg began on
June 17, 1956, at Burstall,
Saskatchewan. Up to
5,000 men at a time
persevered through rain,
mud, snow and ice, to
complete the project just
over two years later.
52
“My father, Guy Lemieux, was an inspector on the site of the final weld [of the
Canadian Mainline], but rain forced cancellation of a planned celebration.
One of the welders had a vintage American 1881 silver coin and Dad asked him
to solder it to the final weld to commemorate the event. Eventually the
coin was removed and donated to the company. It now sits on display at the
TransCanada Tower in Calgary.”
—Roger Lemieux, Construction Services East
Canadian Mainline – By the Numbers
Original length of pipeline: 3,680 km (2,290 mi.)
Current length: 14,101 km (8,762 mi.), longest pipeline in
North America
Length of Canada, from the Pacific to the Atlantic:
About 5,000 km (3,100 mi.)
Tons of pipe used: 655,000, carried by 25,000 railway cars
Lakes and rivers crossed: Almost 200
Amount spent to build: $245 million by TransCanada and $113.5
Hal Kvisle and Roger Lemieux
million by the Northern Ontario Pipe Line Crown Corporation
Gas shipped on Mainline in 1959: 300 million cubic feet per day
by the end of that year
Year Russian pipeline surpassed Canadian Mainline as the longest
in the world: 1980
Gas shipped on Mainline in 2009: 5.6 billion cubic feet per day—about
the same volume of water that flows over Niagara Falls each day
53
1
2 3
An ounce of prevention
By 2010, TransCanada had a 20% market share of all natural gas
shipped in North America, and a system that linked virtually all major
gas supply basins on the continent.
Hundreds of workers, across vast distances in North America, ensure
those complex systems operate efficiently and safely. Ongoing
pipeline integrity programs and maintenance across the network have
combined with significant in-house repair capabilities for big-ticket
items such as TransCanada’s compressors and gas turbines, specialized
welding and non-destructive testing.
The safe operation of the pipelines is a credit to the professionalism,
care and concern of those who watch over this system. Consider that
in 2009 alone, about 1,800 Operations and Engineering employees
recorded zero lost-time injuries for the second time in four years.
No easy feat considering almost 3.5 million hours were worked that
year. TransCanada remains among the top safety performers within
its industry peer group.
4
Pipeline Maintenance is Key
A “pig run” conducted
is going smoothly as the
in the Hearst area of
pig starts its run. Many
Ontario, northeast of
hours later, (4) employees
where corrosion may have occurred. “Smart pigs” travel through
Lake Superior, in 2009.
Michel Blier and Richard
the pipeline collecting and analyzing data to determine if there
Don Bezeau (1) sets
Tessier (in white suits)
are areas of concern.
up for the pig launch
prepare to receive the
in Mattice. A team of
pig out of the line in
contractors (2) loads the
Kapuskasing, 60 km (38
pig into the launcher. The
mi.) away from where it
team listens attentively
started that morning.
TransCanada has an extensive Pipeline Maintenance Program.
In-line inspection, also called “pigging,” looks for any locations
(3) to ensure everything
54
Lat 51°N, Long 114° W: June 2010
TransCanada’s new
24/7/365, and is one
control centre in Calgary
of the largest pipeline
monitors 43,000 kilo-
control centres in
metres of combined
North America.
gas and oil pipeline,
“When you look at a field organization or a maintenance organization, it’s no different than if you took
your car to get serviced at a garage. You know you have to get it serviced and you know there’s money going
out the door when you’re done. And so you see it as nothing more than an expense. What we wanted to
do is take that attitude and change it from being viewed as an expense to a value creation centre. Getting
people to understand the business, what drives the business, and getting them to tell us where we’ll become
more efficient, where we can become more productive—and rewarding them for that—has pushed us a little
ahead of the competition … . And that’s the kind of organization I think anybody wants to be a part of.”
—Jim Baggs, Vice-President, Operations and Engineering
55
North Central Corridor
1
The project experience gained in northern climates and terrains during
capabilities to the Alberta-Saskatchewan border, and reduce
TransCanada’s North Central Corridor project (NCC) was invaluable.
fuel consumption on the entire Alberta System. The expansion has
So were the results of the project, which saw a 300-kilometre (185-
also positioned the company for transporting shale gas from the
mile) pipeline expansion of the Alberta System in its northern section.
Horn River area in a cost-effective manner.
Built by TransCanada’s contractor over two winter construction
seasons—2009 and 2010—the NCC is expected to meet the
anticipated increase in demand from the Alberta oil sands, address
growing receipt requirements in Alberta, improve delivery
Along the way, TransCanada participated in a comprehensive
and meaningful Aboriginal engagement effort with 14 Aboriginal
communities located in the area. It led to over $36 million in
Aboriginal contracting and employment over the course of the
project, a significant result.
Cold case
It was so cold one day
The project included
late January 2010, there
in January, 2009 that a
impressive technological
were over 900 people at
truck thermostat at an
advancements to deal
two work camps, using
NCC construction site
with the harsh climate,
more than 700 pieces of
stopped working when
like the use of high-
equipment on-site.
the temperature dipped
strength pipe, advanced
below -45ºC (-49ºF).
welding techniques
TransCanada’s NCC
project required winter
construction because
some of the terrain was
2
in wet muskeg or in
unstable soil conditions,
and couldn’t have
handled the weight of
machinery in summer.
56
and low-temperature
valves. Additionally, the
company completed
three major Horizontal
(1) directional drill river
crossing where pipe is
strung up with cranes
and then pulled through
the river
Directional Drills—
(2) preparing the pipe
including the 1,110
for welding
metre (3,462 foot)
crossing of the Peace
River in spring 2009. At
peak construction in
(3) pipe stringing
operation
3
57
B.C. shale plays
Beneath the SURFACE
Shale gas formations are the result of ancient seas in North America
that dried up millions of years ago, behind muddy sea beds. Heat
and pressure “baked” the mud into shale rock, while decomposed
aquatic life trapped underneath the rock layers turned into natural
gas. Buried inside the earth’s shale rock formations, shale gas was
once considered too expensive to extract in North America.
Improvements in technology, including horizontal drilling and
multi-stage hydraulic fracturing, have been big breakthroughs. The
potential for increased production has some analysts predicting
shale and other unconventional gas sources accounting for more
than half of North America’s gas supply by 2020.
From a geologic perspective, the Montney and Horn River shale
plays in northeast British Columbia (B.C.) stack up very favourably
with their U.S. counterparts. With the emergence of shale plays, the
remaining productive potential of the Western Canada Sedimentary
Basin (WCSB) has more than doubled—and potentially tripled—
putting to rest the belief that the WCSB will remain in decline.
In the summer of 2010, TransCanada began construction on
Groundbirch, a 77 km (48 mi.) pipeline carrying gas from the
Montney formation, near Dawson Creek, B.C. to a tie-in point on the
Alberta System. Similarly, the Horn River project will add another
72 kilometres (45 miles) of pipeline to transport shale gas from an
area north of Fort Nelson, B.C. These projects are significant capital
investments that may be in play for 25 to 50 years to come.
Aerial view of the Horn
40–100 trillion cubic feet
River region in B.C.
of recoverable shale gas
Beneath the surface
reserves.
lies an estimated
Beyond borders
Technological advancements, economic incentives and royalty
Groundbirch and Horn River pipelines followed soon after the
changes are “changing the game” within the WCSB. TransCanada
jurisdictional change. Through these pipelines, B.C.’s shale gas will
and the industry will also benefit from a favourable ruling by the
have direct access to the Alberta Hub, one of the most significant
National Energy Board that moved the Alberta System to federal
gas trading points on the continent.
jurisdiction in 2009. This reduces regulatory hurdles, enabling
TransCanada to cross provincial boundaries and extend pipelines
into the shale plays in northeast B.C. Applications to build the
58
Greenland
North Slope
Prudhoe Bay
Nunavut
Tapping new supplies
Northwest Territories
Mackenzie
Pipeline network poised for the future
Alaska
Nunavut
Nunavut
Anchorage
Yukon
Iqaluit
Nunavut
Whitehorse
Liard
Juneau
Labrador
Yellowknife
Muskwa-Besa
Horn River
Alberta
Newfoundland
Alberta
British Columbia
Newfoundland
Saskatchewan
Montney
Gr
Edmonton
Saskatoon
Victoria
Tacoma
Washington
Bakken
Oregon
Boise
Green River
Carson City
Nevada
Salt Lake City
Unita
Mancos
San Jose
Wyoming
Powder River
Mancos
Colorado
San Joaquin
Bakersfield
Ventura
Los Angeles
San Diego
Nebraska
Permian
Oklahoma City
Hermosillo
Shale gas basins
Altar
Barnett-Woodford
BarnettWoodford
Chihuahua
Chihuahua
Baja California Sur
Pipelines under construction / in development
La Paz
250
500
500
Bossier City
Louisiana
Houston
Tennessee
Black Warrior
Culiacan
1,000 Miles
1,000
1,500 Kilometers
Norfolk
Columbia
South Carolina
Huntsville
Atlanta
Chattanooga
Consauga Birmingham
Georgia
Alabama
Mississippi
Floyd-Neal
Montgomery
Jackson
Mobile
Tallahassee
N.E. Gulf Salt Dome
New Orleans
Pearsall-Eagle San Antonio
Ford
Gulf Coast
Eagle Ford
Saltillo
Virginia
Raleigh
North Carolina
Charlotte
Nashville
Baton Rouge
Austin
Jacksonville
Florida
Orlando
Tampa
Miami
Florida-Bahama Platform
Monterrey
Nuevo Leon
Durango
Tampico
Durango Zacatecas
Zacatecas
0
Barnett
New York City
Greensboro
Sabinas
Sinaloa
250
Texas
Haynesville
New Albany
Coahuila De Zaragoza
Existing pipelines
0
Dallas
Fort Worth
West Virginia
Kentucky
Arkansas
Woodford Woodford-Caney
Bend
Lubbock
Frankfort
Louisville
Saint Louis
FayettevilleMemphis
Little Rock
Halifax
Richmond
Indiana
Illinois
Missouri
Excello-Mulky
Arkoma
Tulsa
Oklahoma
Fort Worth
El Paso
Sonora
Jefferson City
Wichita
Tucson
Baja California Norte
Traditional natural gas basins
Excello-Mulky
Horton Bluff
DevonianWashington
Marcellus-Utica Maryland
Indianapolis
Springfield
Kansas City
Nova Scotia
Philadelphia
Pennsylvania
New Jersey
Baltimore
Illinois
Lincoln
Kansas
Cleveland
Scotia Shelf
Hartford
Appalachian
Chicago
Des Moines
Omaha
Denver
New Mexico
Mexicali
Detroit
Niobrara
Albany
Buffalo
Sarnia
South Dakota
Piceance
Colorado Springs
Hermosa
Paradox
Pierre
Lewis
Santa Fe
San Juan
Albuquerque
Arizona
Anadarko
Phoenix
Los Angeles
Antrim
Iowa
Denver
New York
Toronto
Michigan
Nova Scotia
Charlottetown
Augusta
New Hampshire
Concord
Massachusetts
Boston
Providence
Montpelier
Vermont
Michigan
Wisconsin
Minneapolis
-Saint Paul
Pierre
Utah
CaliforniaMcClure
Las Vegas
Minnesota
Gammon
Hilliard-Baxter
Mancos Cheyenne
Sacramento
Monterey
Bismarck
Cody
Big Horn
Wind River
Idaho
Horton Bluff
Ottawa
North Dakota
Montana
Helena
Fredericton
Québec
Maine
Spokane
Cordilleran
Overthrust Belt
Salem
Utica
Ontario
Winnipeg
Williston
Lethbridge
Portland
Santa Maria
New Brunswick
Regina
Seattle
Sacramento
San Francisco
Prince
Edward
Island
Colorado
Calgary
Vancouver
Québec
Manitoba
Rocky Mountains
St. John’s
Ciudad Victoria
Tamaulipas
San Luis Potosi
Campeche
Aguascalientes
San Luis Potosi
Merida
Nayarit
Queretaro de Arteaga
Tepic
Yucatan
Guanajuato
Guadalajara
Queretaro
Guanajuato Hidalgo
Campeche
Jalisco
Pachuca
Quintana Roo
Morelia Mexico City
CHAPTER
4 The
Jalapa
Salinas
Colima
Toluca
Chetumal
Campeche
Tlaxcala
Colima Michoacan Mexico Cuernavaca
Veracruz-Llave
Villahermosa
de Ocampo
Morelos Puebla
Tabasco
Chilpancingo De Los Bravo Veracruz
Oaxaca
Peten-Chiapas
Chiapas
evolving Canadian pipeline business
59
CHAPTER 4 Where We’ve Been
July 1998
SEPTEMBER 2008
FEBRUARY 2010
TransCanada-NOVA merger
ATCO agreement proposed
Horn River
Alberta System (23,905 km / 14,854 mi.)
TransCanada and ATCO Pipelines
Filed NEB application for natural gas
joined with Canadian Mainline (14,101
proposed combining of physical assets
pipeline 72 km (45 mi.) to connect new
km / 8,762 mi.), creating one of the
under a single rates and services
shale gas supply in the Horn River basin
largest systems in North America.
structure to provide seamless Alberta
in B.C. to the Alberta System.
It gathers 66% of the natural gas
natural gas transmission service. The
National Energy Board (NEB) approved
MARCH 2010
the agreement in August 2010.
Groundbirch
Foothills
OCTOBER 2008
gas pipeline project that will extend
Merger included 50% ownership of
Construction began on Alberta’s
the Alberta System to connect to
Foothills Pipe Lines Ltd.; the remainder
North Central Corridor
the Montney shale gas formation in
was acquired in 2003. Foothills owned
The project included 300 km (186 mi.)
northeast B.C. (anticipated completion
certificates to build the Canadian
of natural gas pipeline and 26 MW of
in 2010).
portion of the Alaska Pipeline Project
additional compression. The expansion
making it key to TransCanada’s
was completed in April 2010.
produced in Western Canada.
JULY 1998
NEB approved 77 km (48 mi.) natural
ambitions to move northern gas to
North American markets.
APRIL 2009
Alberta System under federal
JULY 2002
jurisdiction
New high-strength steel
The jurisdictional change provided
TransCanada partnered with a Japanese
greater flexibility to transport natural
company to develop and test “X100”
gas to North American markets and
high-strength steel pipe. TransCanada
attract new gas supplies to the
was the first company to use it to
Alberta System.
transport natural gas.
“I’m convinced the steps that got us here are focus and tenacity.”
—Steve Clark, CommerCIal West, Canadian and Eastern U.S. Pipelines
60
We Are Here The TransCanada Journey 1998–2010
Grow with the ﬂow.
5
Chapter 5 Pipeline expansion in the U.S. and Mexico
61
chapter 5
West Coast, Gulf Coast.
TransCanada’s pipeline expansion in the U.S. began in 2004 with
the acquisition of GTN (Gas Transmission Northwest), TransCanada’s
first wholly owned U.S. pipeline asset.
Then, in mid December 2006, TransCanada announced its purchase
of ANR Pipeline, including its gas storage assets, and the remaining
interest in Great Lakes Gas Transmission (through TC PipeLines, LP).
For the next two months, TransCanada worked diligently to finalize
the acquisition, and by February 2007 the deal was closed. The
purchase gave TransCanada access to key supply basins and markets
in the U.S., made it the second-largest provider of natural gas storage
in North America, and added almost 1,000 people to the company.
Further south, TransCanada has two projects in Mexico—
Tamazunchale, constructed in 2006, and Guadalajara, currently
under construction.
LAT 45°N, LONG 119°W
GTN’s Station No. 9 in Oregon’s
High Desert has two compressors,
each capable of 14,100 horsepower
of compression.
62
63
LAT 29°N, LONG 95°W: June 18, 2010
The Houston office is the
In June 2010, about
hub of our U.S. Pipelines
200 Houston employees
businesss—TransCanada
gathered in front of the
has more than 1,600
Alley Theatre for this
U.S. employees, over half
commemorative photo.
of whom came to the
company through the
ANR Pipeline/Great Lakes
acquisition in 2007.
64
HUMAN ENERGY
Michael Barnes had worked in public affairs for
ANR in Houston for several years when TransCanada
acquired the company from its parent, El Paso.
He had other career opportunities before him, but chose
TransCanada, and has never looked back. “I thought TransCanada
to be an excellent fit for me, so I made the jump on my own
as opposed to being part of the acquisition,” he says. “My story’s
a little bit unusual.”
Over the next few years, much of Michael’s work focused on
communications with the hundreds of people who joined
TransCanada with ANR. There were many uncertainties and
anxieties for those who made the switch—TransCanada was an
almost-unknown name to many, and the new employees
Michael Barnes
had questions about everything from how the company would run
its maintenance programs to the terms of its pay and benefits.
“Communications were integral to our success and building
employee confidence,” says Michael. “It’s easy to say that, but it’s
another thing to live it. When you have leaders who are really
dedicated to helping employees understand what the business is about
so that they can do their job, to understand where they fit in the
business, to understand all the processes and changes that have
occurred, and to build a team, it speaks volumes about the company.
“In Houston, we’re approximately 1,700 miles from Calgary, but I
feel very connected to my department and the home office. I don’t
really see any border issues because no one has treated me like that.
In terms of blending the cultures, I find them very similar. In the
U.S. and Canada we have people who come to work every day trying
to do the best they can and who bring a lot of integrity to the job.
I believe that’s the common foundation. On both sides of the border,
we have people with high energy, who are very good at planning
and who get results.”
65
Integration
“Through it all, our teams have proven they get the job done. The level of work
and commitment that our employees demonstrated on both sides of the border is
nothing short of remarkable and exemplifies collaboration.”
—Lee Hobbs, senior vice-president and general manAger, U.S. Pipelines
The integration of ANR into TransCanada was characterized by tight
processes for getting the job done. Towards the end of 2008, the
timelines, rapid decision-making, and complex technical issues.
process began again—this time for Great Lakes, which had up to that
“In the transition agreement [with El Paso], there were some things
time been operated as a separate entity.
that were very, very hard deadlines, and the commercial system in
In three years, TransCanada has unquestionably solidified its
particular was one of them,” recalls Rick Coutts, who was the ANR
presence in Houston and across the U.S. “We’re here for the long
integration team lead during 2007 and 2008. “We had to meet that
haul,” says Lee. “This is what we do. We’ve done it for decades.
deadline, because they were not going to continue to give us access
We do pipelines.”
beyond the agreed deadline, and they had some solid commercial
reasons for that. That’s just the ground rules we had to work with.”
ANR Integration – By the Numbers
The commercial system was one of the most technically challenging
Date of acquisition: February 22, 2007
aspects of integration—along with the pipeline SCADA (Supervisory
Number of people who joined TransCanada with ANR: 900+
Control and Data Acquisition) systems. “These were the two systems
that were most core to the operation of the business,” says Rick.
And that was just the beginning...
In the year following the acquisition, U.S. and Canadian employees
teamed up to build new gas control, data center and backup facilities
for U.S. Pipelines. They also had to learn dozens of new systems and
Miles of pipeline: 10,500 (17,000 km)
Compressor stations: 59
Storage fields acquired: 15, with 236 Bcf of storage
Offshore platforms: 5
States within ANR’s market area:
5 (Wisconsin, Illinois, Indiana, Michigan and Ohio)
Number of people involved in integration efforts: at the peak,
about 250 on any given day
Time to set up new gas control and commercial operations:
154 days (from February 22 to July 26, 2007)
Size of new data center in downtown Houston (pictured here):
7,500 square feet, 180 servers
Number of pieces of equipment (“entities”) set up in the Avantis
maintenance system: 130,000 (twice as many as expected)
Number of unique “services” transferred from previous owner,
El Paso: 350 (from pipeline integrity services, to engineering project
The ANR integration
Services, and Lee Hobbs,
effort was led by Rick
Senior Vice-President
management services, to financial services…)
Coutts (left), now Vice-
and General Manager,
President, Information
U.S. Pipelines.
Timeline to integrate all systems and processes: 2 years
66
Customer satisfaction rating through integration: 87%
“We came to realize that for the most part, we were all pipeliners at heart. I would
say we found more commonalities than dissimilarities, and that allowed us to begin
getting to know each other.”
—Rick Coutts, ANR integration team lead
67
Lat 30°N, Long 96°W: September 15, 2008
When Hurricane Ike
here a few days after
made landfall in
the storm discussing how
southeast Texas, Joe
TransCanada’s offshore
Pollard and Steve
assets were affected. The
Jaskolski had already
efforts of the commercial
relocated—along with
services and system
members of their teams
operations teams meant
—to the disaster recovery
gas kept flowing to
site. The two are shown
customers.
68
National Oceanic and Atmospheric Administration
IN THE EYE OF THE STORM
1
“...The company came to my rescue [after Hurricane Ike].
They came, they aided me, they brought me some drinking
water, and because we were out of power, there was no
way of preserving the baby’s food, the refrigerator was out.
They brought me a generator, and when it didn’t work,
they brought me another one.”
—Joseph Fomukong, U.S. Pipelines Commercial Operations
Many of ANR’s employees live and work in parts of the country that
are commonly threatened by severe conditions.
ANR’s Southwest Mainline traverses what’s known as Tornado Alley,
Hurricane Ike (1) made
2
landfall just southeast of
Houston on September 13,
2008, with winds of 110 mph
(175 km/h). As it approached
is where many destructive hurricanes gather their deadly strength.
In May 2007, a tornado leveled Greenburg, Kansas, the site of
one ANR compressor station. TransCanada helped rebuild the town’s
the Texas coast it became
livestock pavilion, an act one town official said symbolized the
the largest Atlantic tropical
“rebirth of the community.”
cyclone in recorded history
—measuring 900 miles
(1,450 km) in diameter.
Houston’s gas control (2)
was moved inland and
Steve Mize, Gas Control
Manager for U.S. Pipelines
3
and the Southeast Mainline gets its start in the Gulf of Mexico, which
In September 2008, Hurricane Ike, the third-most-costly hurricane in
U.S. history, slammed Southeast Texas causing tremendous damage to
the Houston area, which is home to several hundred employees.
Thanks to TransCanada’s well-rehearsed hurricane preparedness
plan, pipeline operations were safely moved to an emergency control
Central, coordinated gas
center outside Houston. Employees, many with damaged homes and
control activities during
no electricity or water, stayed on the job, ensuring gas continued
the storm. ANR’s offshore
to reach customers. Other employees tracked down colleagues with
assets, such as Eugene Island
whom they had lost contact and distributed generators and fresh
188 (3) were shut in. In the
aftermath, TransCanada
water to those in need.
donated $50,000 to the
American Red Cross’s relief
efforts (4).
4
69
TC Pipelines, LP
1
2
3
Some of the LP assets:
sites. This equipment
(1) Great Lakes Gas
reduces the temperature
Transmission, Crystal
of the gas following
Falls compressor station
compression, helping it
(No. 8) in Michigan, an
move down the line more
interconnection point
efficiently. (3) Tuscarora
with the ANR system.
yard piping at the Radar
its 30% interest in Northern Border. This transaction yielded US$228
(2) Northern Border gas
compressor station in
million to TransCanada, as the company worked to enhance its balance
after cooler fans at one of
Northern California.
sheet post-merger. TransCanada maintained about a 33% ownership in
the pipeline’s compressor
The U.S. pipelines story wouldn’t be complete without TC PipeLines, LP.
TransCanada set up the LP in 1999 as a financing vehicle to hold certain
mature U.S. pipeline assets. TransCanada’s first asset sale to the LP was
the LP, allowing it to retain some ownership and control of the asset.
Throughout the life of the LP, several assets have been acquired from
TransCanada with proceeds of the sales used to finance the growth of
TransCanada’s business.
Today, the LP’s assets total approximately 3,700 miles (5,920 km) of
federally regulated U.S. interstate natural gas pipelines. The LP owns or
has partial ownership in Northern Border (since 1999), Tuscarora (since
2000), Great Lakes (since 2007), and North Baja (since 2009). Over time,
TransCanada has assumed the operation of all of the LP’s pipelines.
Greg Lohnes, President,
and Board Chair of TC
PipeLines, LP.
70
Lat 40°N, LONG 74°W: June 9, 2009
In 2009, the LP
the opening NASDAQ
representative, Mark
celebrated its 10-year
bell in honour of the
Zimmerman, Amy Leong,
anniversary. Members
occasion. (left to right)
NASDAQ representative,
of the management and
Diane Karst, Rhonda
Donald DeGrandis.
investor relations team
Amundson, Terry Hook,
had the chance to ring
Annie Belecki, NASDAQ
Building and growing
Under a unified command
Just as things began to
“We knew we would be
settle from the ANR and
much stronger and more
Great Lakes integration,
effective as a unified
TransCanada made the
entity with an aligned
decision in 2009 that it
leadership team in a
would consolidate
single location,” says Lee.
its U.S. natural gas
“What a difference it
pipelines business with
makes having teams
the commercial and
in one place. We are able
administrative functions
to make better decisions
in Houston. “It was
in a more timely manner
another major change,”
when we can walk down
says Lee Hobbs, Senior
the hall and consult
Vice-President and
directly on a project or
General Manager for U.S.
initiative.”
Pipelines. By June 2010,
consolidation was
completed.
Lat 29°N, LONG 95°W: June 18, 2010
Marx Talley (foreground)
and Doug Conner
monitor the pipes from
Houston’s Gas Dispatch.
Six systems—ANR, Great
Lakes, Northern Border,
GTN, Tuscarora and
North Baja—are now
all controlled from the
Houston office.
72
Old pipeline learns new trick
1
TransCanada’s longest-
opportunities, but
successful. It was a win-
serving pipeline recently
also some operational
win for our customers
went in a new direction.
challenges.
and staff. Now we’re
ANR’s Southwest Main-
“From a collaboration
line was completed in
standpoint, it required
1949 (1) and began
every group in our U.S.
moving gas from the
offices to come together
midcontinent to the
to make that service
U.S. Midwest. But just
work—extra hours from
two years ago, the line
everyone,” says Dean
was modified so that
Ferguson, currently
gas could flow in both
Vice-President, U.S.
directions. The non-
Pipelines West. “Through
traditional flow pattern
innovation and hard
created commercial
work our team was
looking at bidirectional
flows for the Southeast
Mainline and Great
Lakes, and GTN.”
Nice to meet you
The ANR name was well-
station in Indiana says,
In just one example,
known in communities
“ANR has been doing
the Newcastle Courier-
along the pipeline.
charitable work around
Times ran this photo
But to local residents,
here for years.
publicizing TransCanada’s
“TransCanada” was
TransCanada has enabled
donation to the Sulphur
pretty much unheard of.
us to continue that
Springs, Indiana,
To help introduce the
legacy and people are
volunteer fire depart-
company, TransCanada
starting to learn the
ment (left to right):
undertook a significant
TransCanada name. The
Dwight Henry and
community investment
positive word-of-mouth
Ronnie Cross of
program in the American
that these donations
TransCanada; Fire
Midwest in 2009. Dwight
generate goes a lot
Department members
Henry, a technician
further in building your
Kip Jones, Wes Jones,
at our Sulphur Springs
reputation than any
John Province and
compressor
sticker on the side of
Curtis Parker (2).
your truck.”
2
Guadalajara under construction
The Guadalajara
regasification terminal
pipeline supports a major
in Manzanillo to
infrastructure project
Guadalajara, 310 km (193
undertaken by Mexico’s
mi.) inland. Shown here
state-owned energy
(3) is the Tamazunchale
company to meet the
Pipeline in east central
country’s growing
Mexico. Construction was
demand for electricity
completed in late 2006.
and natural gas. The
pipeline will ship from a
liquefied natural gas
3
73
Chapter 5 Where we’ve been
NOVEMBER 1949
DecEMBER 1998
FebRUARY 2007
Michigan Wisconsin Pipeline
TC PipeLines, LP formed
ANR Pipeline acquired
begins service
As of June 2010, TransCanada owned
A 10,500 mi. (17,000 km) system
Now known as the southwest leg of ANR,
approximately 38% of the LP.
transporting natural gas from Texas,
Oklahoma, the Gulf of Mexico and
the Michigan Wisconsin Pipeline began
service in late 1949. Sixty years later,
MarCH 1999
Louisiana to markets in Wisconsin,
TransCanada’s longest-serving pipeline
Portland Natural Gas Transmission
Michigan, Illinois, Ohio and Indiana.
still carries gas from the Texas and
system went into service in New
Included 236 Bcf of natural gas storage.
Oklahoma panhandles to the
England
U.S. Midwest.
OctOBER 1961 Serving Maine, New Hampshire
May 2009 and Massachusetts (295 mi./ 474 km).
Guadalajara natural gas
TransCanada owns 21.4%.
Gas Transmission Northwest (GTN)
Construction completed.
pipeline project awarded
The Comisión Federal de Electricidad
NovEMBER 2004
(CFE) confirmed that a TransCanada
Gas Transmission Northwest (GTN)
affiliate will build, own and operate
the pipeline from near Manzanillo on
DECEMBER 1967 Acquired with more than 1,351 mi.
Great Lakes Gas Transmission in
(2,174 km) of pipe in the Western U.S.
Mexico’s Pacific Coast to Guadalajara
service
Acquisition also included the North Baja
(190 mi./305 km).
TransCanada has 50% ownership. In
Pipeline system (80 mi./129 km).
April 2010 February 2007 remaining 50% acquired
by TC PipeLines, LP and TransCanada
FebRUARY 2006
Bison
assumed operatorship.
Northern Border
Natural gas pipeline project received
In 2006, TC PipeLines, LP increased its
Federal Energy Regulatory Commission
January 1992
ownership in Northern Border to 50%. In
(FERC) certificate of public convenience
Iroquois Gas Transmission System
addition, pipeline operations transferred
and necessity. Once completed, the
Began full operations designed to
to TransCanada (1,398 mi./2,250 km)
pipeline will extend 303 mi. (487 km)
from the Powder River Basin in Wyoming
link Canadian supplies with Northeast
markets. Since then, Iroquois has
DECEMBER 2006
to TransCanada’s Northern Border
operationally doubled the amount of
Tamazunchale
pipeline.
gas transported on its system.
Natural gas pipeline went into service in
east-central Mexico (80 mi./129 km).
“It has been the incredible growth that has been most remarkable.”
—John Roscher, Law and Regulatory Affairs
74
On tap.
6
Chapter 6 The essential role of gas storage
75
chapter 6
Going underground.
Let’s say you are a company that transports natural gas: what
should you do when your customers don’t need quite as much as last
month, or a cold snap hits, and more is needed to heat homes
and businesses? TransCanada’s decision to invest in the gas storage
business positions the company to address these fluctuations in
market demand.
Starting from one storage facility in Alberta (CrossAlta, partially
owned since 1994), TransCanada has expanded its gas storage
business dramatically in recent years.
The company became one of the largest storage providers in
North America almost overnight. First came the decision to build a
50-billion cubic foot (Bcf) facility in Edson, Alberta. Then, in
early 2007, TransCanada acquired ANR’s storage assets from El Paso,
adding 230 Bcf to the portfolio. Cold Springs 1, the newest facility
in Michigan, tacked on another 14 Bcf in 2008.
Lat 53°N, Long 116°W: June 24, 2010
At the end of 2006, TransCanada
completed construction on its Edson gas
storage facility, with a capacity of 50
Bcf and a daily maximum deliverability
of 750 mmcf. This, combined with the
CrossAlta facility and other Alberta
storage leases give TransCanada control
of about 140 Bcf of storage capacity
in Alberta—about one-third of the
province’s total. Shaun Chalmers,
(shown on right), one of the employees
who operates the Edson facility,
performs a plant check for regular
maintenance.
76
77
Lat 44°N, Long 85°W
78
Andy Radtke, of the
a few months after
Reservoir Services Group,
construction of the
second from right,
facility was finished.
explains the scope of
CS1 has six wells
the storage operations
and a compressor
to state regulators who
station that provides
visited Cold Springs 1
7,000 horsepower of
in the spring of 2009,
compression.
Reservoir Services Group
“We have a very powerful asset at work; it’s very reliable and well
positioned in its geographic market.”
—Steve Nowaczewski, Reservoir Services Group
Niche group for a niche market, TransCanada’s Reservoir Services Group is a
unique crew.
Comprised of engineers, geologists, well-drilling specialists and administrative
associates, the Troy, Michigan-based team’s focus was the ANR Gas Storage
assets located right in their backyard. There, they work closely with the field
technicians to maintain and enhance the company’s storage fields, and to
investigate and develop new storage projects. More recently, their recognized
expertise is being applied to TransCanada’s Alberta-based storage assets and
to new growth opportunities and acquisitions across the continent.
“While we’re a relatively small group, we have a lot of years of experience,”
says Steve Nowaczewski, who’s been working with ANR storage assets for
Steve Nowaczewski
29 years. “Because we’re a niche group in our company—we have people
with highly specialized expertise—we have to train and develop our people
ourselves. We take that obligation very seriously.”
That makes the group very tight-knit and also helps keep TransCanada ahead
in the very competitive natural gas storage market.
In Michigan, it also helps to have the capacity and flexibility that comes with
16 fields situated along two major interstate pipelines. It gives customers peace
of mind to know that their gas will be available when they need it most.
“When we say that our portfolio can deliver rates and volumes reliably over
the course of time, we can do it,” says Steve. “That’s not to say we don’t
have operating troubles along the way, but one of the strengths of the ANR
system is that total portfolio of 16 fields. If we do have operating issues in
one particular field, we have other fields to back that up.”
Those strengths will position TransCanada well as it looks to grow the
storage business.
79
Filling the gap
ONE BUSINESS, TWO MODELS
HOW IT WORKS
“Not by accident, but through a series of somewhat unrelated
Gas is injected into storage reservoirs when demand is low in summer
transactions, we became a very large storage company,” says Brandon
months and withdrawn during the higher-demand winter season,
Anderson, Vice-President, Gas Storage. “We’ve got a storage business
ensuring a reliable supply of gas for TransCanada’s gas transmission
that spans two business models—the unregulated or merchant
customers.
operation that we have in Alberta, and the rate-regulated storage
TransCanada’s Michigan assets operate in a regulated environment,
in Michigan. On the risk profile, I think it [gas storage] kind of
with regulated storage and published gas transmission tariffs. In
sits in between the regulated Canadian and U.S. pipelines and the
Alberta, gas storage is non-regulated, meaning the company sets
merchant power business. So it fills an interesting gap in the
rates for storage services based on market conditions, as well as
portfolio of the company.”
buying and selling gas in our inventory. While there remains some
room for growth, TransCanada retains a dominant competitive
position with its current gas storage assets.
2
1
Cold Springs 1’s first- and
CS1 is the latest natural
second-stage recycle
gas underground
compressors (1) are
storage facility to
shown here shortly
be commissioned by
before installation.
TransCanada.
(2) Edson facility.
80
Bird’s-eye view of the
Edson gas storage
facility, about 200 km
(125 mi.) from Jasper,
Alberta.
81
DECEMBER 2006
1941
First storage field
Edson Gas Storage facility in-service
The Austin gas field in central Michigan
Gas storage capacity expanded,
was converted to storage; ANR’s original
positioning TransCanada to become
storage field is still in operation.
one of the largest natural gas storage
1940s THROUGH 1970s
The Edson storage facility is wholly
providers in Western Canada (50 Bcf).
More fields converted
owned by the company and was
ANR Pipeline Company’s predecessor,
TransCanada’s first venture in Alberta
Michigan Wisconsin PipeLine Company,
as a storage operator.
acquired depleted oil and gas fields in
central and southeast Michigan and
FEBRUARY 2007
converted them to gas storage.
ANR acquisition closes
AUGUST 1991
gas storage capacity in Michigan.
Includes more than 230 Bcf of natural
Blue Lake Gas Storage Company was
formed
A partnership between ANR and an
DECEMBER 2007
“STEP 2007” Storage Enhancement
outside partner, Blue Lake is the largest
Project Completed
storage field in terms of volume and
Project added 3 Bcf of storage capacity
deliverability that ANR operates.
in four ANR storage fields.
APril 1994
DECEMBER 2008
CrossAlta Gas Storage in-service
Cold Springs 1 facility opens in
The facility, of which TransCanada owns
Michigan
60%, expanded over the years and now
Operated by ANR, the facility added
has a total working natural gas capacity
14 Bcf of gas storage to TransCanada’s
of 68 Bcf. TransCanada’s partners
portfolio.
operate the field.
“We have a very entrepreneurial leadership, and also the ability
to go and try different things and see what works. We were given
lots of trust and support.”
—Brandon Anderson, Gas Storage
82
Earth, wind, ﬁre, water.
7
CHAPTER 7 Building the power business
83
chapter 7
Starting out. Growing up. Going strong.
Like many energy companies in the 1990s, TransCanada’s first
the region by acquiring hydro assets, developing a major wind power
steps in the power business were on the marketing and trading
project, and establishing a successful retail power business.
front. But around 1998, the company decided to shift its focus
to owning and managing power generation assets.
Other major milestones included a significant investment in
Bruce Power, the second-largest nuclear power facility in the world,
The early years were defined by initial forays into greenfield
and the acquisition of Ravenswood, which is capable of supplying
development. In Alberta, TransCanada was one of the most successful
more than 20% of the power to New York City.
new entrants into the newly deregulated power market, building
five cogeneration plants in the space of as many years, and ultimately
winning the rights to three Alberta Power Purchase Arrangements.
In Ontario the company built four plants and purchased a fifth—
all of which were ultimately rolled into the TransCanada Power LP
and later sold. However, development in Eastern Canada continued,
with greenfield projects of increasing scale, including TransCanada’s
first wind farm.
Today, TransCanada is Canada’s largest independent power producer
and stepping into new regions of the U.S. “If there’s anything that
surprised me, it’s probably how quickly we did it,” says Karl
Johannson, Senior Vice-President, Canadian Power. “When I look
around at the industry in Canada I see some companies that have
been around for over 100 years and we were able to exceed both
their capacity installed and their profitability in less than 12 years.
That speaks highly of our ability to plan and execute strategies.”
The U.S. Northeast was another area the company knew well due
to the pipelines already in TransCanada’s portfolio. Beginning with a
single New England power plant in 1996, TransCanada grew in
LAT 40° N, LONG 73° W
“We definitely had a strategy that
was defined as being opportunistic, and
that has served us well. We diversified
our fuel mix and that was deliberate
and I think we achieved that. We
focused on areas we know; we’ve
done that.”
—Bill Taylor, Senior Vice-President
and General Manager, Northeast
Region.
Ravenswood Generating Station
(shown at right) in Queens, New York.
84
85
Lat 51ºN, Long 114ºW: October 16, 2009
The way TransCanada built the power
business fits the recipe book for organic
growth, starting with building $40
million projects, then $100 million
projects, then $500 million projects, and
then a $2 billion project. The power
portfolio has expanded to include
natural gas, nuclear, coal, hydro and
wind generation.
ALBERTA PPAs
It’s 1999. TransCanada is refocusing in the wake of its
merger with NOVA the year before. Though the prevailing
mood is to sell rather than buy assets, a not-to-be-missed
opportunity presents itself.
Based on an investment thesis that power demand and prices would increase
following deregulation and restructuring in Alberta, Alex Pourbaix, then-Senior
Vice-President, Power Ventures (at left), convinces the TransCanada Board that the
company should enter an auction to purchase up to two leases on the output of
coal-fired power plants (the Alberta Power Purchase Arrangements, or PPAs).
“[The bidding] was actually done on the Internet, which was very novel for the
time. There were progressive rounds where you would bid on a PPA, then other
people could top your bid, then you would have a chance to top it again in
successive rounds. At the start, we saw about one bid a day; by day seven, there
was a bid every hour. They had consulted experts on game and auction theory
to drive the highest price, so you could actually watch what your competitors were
bidding. It was fascinating. The Board had authorized us to bid on two PPAs,
and we could go up to something like $300 million total, but as we started bidding,
the price went up over $200 million on just one of the PPAs; the Board gave
us a little more money if I recall, to keep bidding, but in the end, we just acquired
one, Sundance A, for $215 million.”
Ironically, just over a year later, Enron Canada began to unravel, and was looking
to offload assets, including the second PPA TransCanada had bid on, Sundance B.
Terry Bennett, Vice-President, Power Development, recalls the purchase: “I think it
was December 14th when the opportunity became real, and we had to get it done
by the end of the year because of a complex court and bankruptcy process with
Enron Canada and its parent. So we were literally here every day, and closed it on
December 30th. It was very cool to see a big company like TransCanada react
and mobilize that quickly. I’ll admit, it was sort of a fun time.”
Four years after that came a third PPA purchase. “Sheerness was notable in that,
at the time, it was our largest single power acquisition outside of Bruce,” says Karl
Johannson, Senior Vice-President, Canadian Power. “Most other potential buyers
could not accept the size of the transaction and tried to buy only parts of it.
This acquisition gave us a unique opportunity to achieve large scale quickly in a
growing market. We had the confidence that we could take this large block
of power and effectively market it.”
87
LAT 43°N, LONG 79°W: August 27, 2009
Still under construction
during peak demand
and due online in late
and generate enough
2010, Halton Hills
power for about
Generating Station in
600,000 homes.
Ontario will operate
Natural Gas
“Every time you win a bid, it’s a team effort and there’s always a feeling of great
satisfaction. That certainly is one of the highlights of the job. If you lose, there’s the
other side of that. But at the end of the day, we learn something from it, and there’s
always a lesson to be had that you use as you move forward to the next project.”
—Finn Greflund, VICE-PRESIDENT, POWER GENERATION AND DEVELOPMENT
GREENFIELD DEVELOPMENT
TransCanada’s greenfield power development business goes back
to the late 1990s, when the company began building projects in
Alberta and Ontario, starting with plants of less than 100 MW each.
“TransCanada had money to invest and it was a big competitive
advantage in those days, because the typical independent power
producer was a very small company that had all sorts of difficulty
trying to arrange financing,” recalls Karl Johannson, Senior VicePresident, Canadian Power. By June 2010, the company had
15 greenfield power projects under its belt (some of them sold as
part of the Power LP in 2005). Most of these have been natural
gas-fired plants. Today, TransCanada is capable of building some
of the largest gas-fired power projects in North America.
Some of the latest projects use high-efficiency, low-emissions
technology to minimize their environmental impact.
Combined-cycle natural gas generating stations, such as
Halton Hills Generating Station (HHGS), use 30 to 40% less fuel
energy than traditional generation alternatives. In addition to being
amongst the most energy-efficient generators, HHGS also uses
low-emissions technology to further minimize air pollution.
How it works:
• Natural gas is used to fuel twin gas turbine generators, which
generate electricity and hot exhaust gas
• The hot exhaust gas from the turbines is used to make steam which
Finn Greflund led
Left to right: John
a number of our very
Mikkelsen, Finn
successful greenfield
Greflund, Terry Bennett,
power development
Nick Di Domenico, and
projects. Pictured here
Christine Cinnamon.
are Finn and some of his
team at Portlands Energy
Centre, in Toronto.
generates additional electricity via a steam turbine
• After passing through the turbine, the steam is condensed to water,
and the water is reused in the steam generator
89
by the numbers
Date of initial TransCanada investment: February 2003
Year investment first proposed to TransCanada
Board (declined): 2001
Rank among world’s nuclear power plants: 2nd,
behind the Kashiwazaki-Kariwa plant in Japan
Land area: 932 hectares (2,303 acres)
TransCanada ownership: 48.8% of Bruce A,
31.6% of Bruce B
Roads on site: 56 km (35 mi.)
TransCanada employees onsite: 5
Bonazzo, all of TransCanada’s
Bruce A: 4 CANDU reactors (2 online,
2 in refurbishment)
Operations and Engineering
Bruce B: 4 reactors (all online)
Bruce restart project team
(left to right) Brett Schoneck,
John Soini, Gary Juenke, Larry
project management group.
Wildlife living on site: 200+ species
Bruce Power employees who operate the plant:
About 3,700 (2)
Power output: 4,700 MW (6,200 MW after restarts)
Turbine hall length: 1,460 metres (4,790 feet)
(more than 14 CFL football fields)
1
2
3
4
Nuclear
TransCanada’s Corey Goulet, Vice-President, Technical Development
(3, left), recently transferred to the Bruce Power nuclear facility near
5
Kincardine, Ontario, on the shore of Lake Huron (4). He talks about
how working at a nuclear power plant is different from working at a
conventional plant.
“The first thing you notice is a lot more security. The whole process of
getting into the facility as a visitor or as a new employee takes a lot
longer,” describes Corey.
“The second thing that struck me was the enormity of the facility.
Bruce produces more than 6,000 MW, the equivalent to about ten of
our Portlands facility. It takes 25 people to operate Portlands, so for 10
Portlands, we have 250 people, right? This facility has almost 4,000.”
One reason for the large staff is self-sufficiency; in a rural environment,
Containment structure
line
Bruce must supply almost all ofSteam
its own
services, including electricity,
Turbine
heavy equipment operations,
food services, medical care,
fire services
Steam
generator
generator
and security.
“Because of the nature of the work, you have to control everything
Pump
Core
from a radiological
safety perspective. You have to control what
Condenser
comes in and out much more carefully than you do at a
different type
cooling
water”
of power plant; you really need a more self-contained site.
Lake
Pump
How it works
The Bruce Nuclear
Pressurized water
moderator and coolant
Steam
Lake water
Unpressurized
water
Generating Station,
the second-largest
nuclear power facility in
Containment structure
the world, uses CANDU
Steam line
Turbine
generator
Steam
generator
(CANada Deuterium
Uranium) reactors to
generate electricity.
Here’s how they work:
Core
Pump
Condenser
cooling
water
In the primary loop,
pressurized heavy water
is passed through
Lake
Pump
the reactor core.
Pressurized water
Steam
Unpressurized
water After
Lake water
Here, the fission of
The pipes of
the primary
moderator
and coolant
The steam produced is
passing through
uranium or other nuclear
loop are passed through
forced through a steam
the turbine, the steam
fuels heats the water.
a steam generator filled
turbine, which in turn
is piped across a tertiary
Because it is under
with low pressure light
powers the generators
loop containing cold
high pressure, it can be
water in the secondary
that produce electricity.
water, which is returned
superheated without
loop. Because the water
boiling.
in the secondary loop is
to the steam generator.
at low pressure, it boils.
91
Hydro
Vernon Station: 100 years of
hydroelectric power generation
Vernon Station, a hydroelectric facility on the Connecticut River
TransCanada opted to refurbish Vernon Station by installing four
between Vermont and New Hampshire, was built in 1909, and was
modern turbines to replace the obsolete units and making other
designed to produce 16 MW of power from eight turbine generator
improvements to the powerhouse. After the $55 million upgrade was
units. It was the first plant in the Northeastern U.S. to transmit
completed in May 2008, Vernon Station returned to full power, with
electricity across state lines.
a capacity of 32 MW.
In April 2005, TransCanada acquired Vernon and 12 other hydro-
At Vernon’s 100th birthday party last year, hundreds of New
electric plants from USGen New England. By then, Vernon was
Englanders celebrated the facility’s past and present.
showing its age. Two units had been decommissioned because of
mechanical failures, while two units were on “emergency run
only” status because of equipment problems.
Vernon Station (left) is
electricity and are a key
The vintage postcards
one of 13 TransCanada
part of the U.S. Northeast
(above, from the top),
hydroelectric
power business. Many
depict “The New Dam”
generating stations
are historic landmarks.
at Bellows Falls, Vermont
on the Connecticut
Deerfield No. 2 Station in
(in service 1928), Vernon
and Deerfield Rivers.
Conway, Massachusetts,
Station (1929), and
Combined, these facilities
began operating in 1913.
Comerford Station, near
produce 567 MW of
Monroe, New Hampshire
(1930).
Robert Burrington and
David Fain inside the
15 MW Harriman Station
in Vermont.
“In the case of the hydro facilities, there were some really excellent, dedicated staff
who joined us with the assets. They had continued to operate the hydro facilities
through some very rough years and so when they saw us come on board they were
relieved, I think a little bit, that we were financially sound and we were committed
to the assets and staff for the long run. Vernon is an example where the employees
were really thrilled that the company was very committed to taking what was a
100-year-old facility and giving it a new lease on life.”
—Bill Taylor, Senior Vice-President and General Manager, U.S. noRtheast Region
93
Greenland
powering North America
Nunavut
11,700 MW and growing
Nunavut
Alaska
Nunavut
Anchorage
Yukon
Iqaluit
Nunavut
Whitehorse
Juneau
Yellowknife
Newfoundland
Mackay River
Cogeneration Plant
165 MW – Gas
British Columbia
Bear Creek
Cogeneration Plant
80 MW – Gas
Alberta
Sundance ‘A’ PPA
560 MW – Coal
Redwater
Cogeneration Plant
40 MW – Gas
Edmonton
Sundance ‘B’ PPA
353 MW – Coal*
Vancouver
Prince
Edward
Island
Ontario
Regina
Cancarb
Waste Heat Recovery
Power Plant
27 MW
Spokane
Portland
Winnipeg
Helena
Montana
Toronto – Power Marketing Office
Minnesota
Bismarck
Oregon
Boise
Minneapolis
-Saint Paul
Pierre
Idaho
South Dakota
Sarnia
Sacramento
San Francisco
Carson City
Nevada
Salt Lake City
Saint Louis
Frankfort
Lincoln
Colorado
Utah
Kansas City
Denver
San Jose
California
Colorado Springs
Kansas
Las Vegas
Santa Fe
Phoenix
San Diego
Missouri
Albuquerque
Arizona
Mexicali
Arkansas
Oklahoma City
New Mexico
Coolidge
Generating Station
(Under Construction)
575 MW – Gas
Lubbock
Hermosillo
Bossier City
Louisiana
Texas
Sonora
Houston
Hartford
New York City
Norfolk
Raleigh
North Carolina
Charlotte
Tennessee
Bellows Falls
Comerford
McIndoes
Moore
Sherman
Vernon
Wilder
Atlanta
Birmingham
Alabama
Georgia
Montgomery
Jackson
Mobile
Tallahassee
New Orleans
San Antonio
Jacksonville
49 MW
164 MW
13 MW
192 MW
7 MW
22 MW
42 MW
Deerfield River System
Florida
Orlando
Tampa
Chihuahua
Miami
Coahuila De Zaragoza
TC HYDRO
Connecticut River System
Columbia
South Carolina
Huntsville
Baton Rouge
Austin
Chihuahua
Memphis
Mississippi
Fort Worth
El Paso
Virginia
Nashville
Little Rock
Dallas
Tucson
New Hampshire
Concord
Massachusetts
Ocean State Power Plant
Boston
Providence 560 MW – Gas – Combined Cycle
Greensboro
Kentucky
Tulsa
Oklahoma
Albany
Buffalo
Louisville
Jefferson City
Wichita
Bakersfield
Los Angeles
Des Moines
Omaha
Vermont
Nova Scotia
Halifax
Grandview Cogeneration Plant
Maine
90 MW – Gas
Kibby Wind Power
132 MW – Wind
Augusta Westborough – Power Marketing Office
Portlands
Energy Centre
Detroit
Cleveland
275 MW – Gas –
Philadelphia
Combined Cycle*
Chicago
New Jersey
Oakville Generating Centre
Baltimore
(In Development)
Indianapolis 900 MW – Gas –
Washington
Ravenswood
Illinois
Maryland
Combined Cycle
Generating Station
Richmond
2480 MW – Gas &
Indiana
Springfield
Fuel Oil – Combined Cycle
West Virginia
Iowa
Nebraska
Montpelier
New York
Toronto
Halton Hills
Generating Station
(Under Construction)
683 MW – Gas – Michigan
Combined Cycle,
Wyoming
Cheyenne
Ottawa
Bruce Power LP
2474 MW – Nuclear*
Wisconsin
Fredericton
Québec
Bécancour
Cogeneration Plant
550 MW – Gas
North Dakota
Salem
Nova Scotia
Charlottetown
New Brunswick
Calgary – Power Marketing Office
Deerfield No.2
Deerfield No.3
Deerfield No.4
Deerfield No.5
Harriman
Searsburg
6 MW
7 MW
6 MW
14 MW
39 MW
5 MW
Baja California Sur
Sinaloa
La Paz
Culiacan
Saltillo
Zacatecas
0
0
250
250
500
500
1,000 Miles
1,000
1,500 Kilometers
Monterrey
Nuevo Leon
Durango
Durango Zacatecas
Ciudad Victoria
Tamaulipas
San Luis Potosi
Aguascalientes
San Luis Potosi
Merida
Nayarit
Queretaro de Arteaga
Tepic
Guanajuato
Yucatan
Guadalajara
Queretaro
Guanajuato Hidalgo
Campeche
Jalisco
Pachuca
Quintana Roo
Morelia Mexico City
Jalapa
Colima
Chetumal
Toluca
Campeche
Tlaxcala
Colima Michoacan Mexico Cuernavaca Veracruz-Llave
Villahermosa
de Ocampo
Morelos Puebla
Chilpancingo De Los Bravo
Oaxaca
Tabasco
Chiapas
St. John’s
Cartier Wind Energy
365 MW – Wind*
Saskatoon
Lethbridge
Seattle
Tacoma
Washington
Québec
Manitoba
Sheerness PPA
756 MW – Coal
Calgary
Carseland
Cogeneration Plant
80 MW – Gas
Victoria
Newfoundland
Saskatchewan
* Partially Owned – MW Stated as TransCanada’s proportionate share
Ravenswood
Ravenswood Generating Station, a 2,480 MW gas- and oil-fired plant,
is capable of supplying more than 20% of New York City’s power.
TransCanada acquired it on August 26, 2008.
Just three days later, technicians discovered a vibrational anomaly
in ”Big Allis,” a 1,000 MW turbine that is the plant’s biggest, and
that was the biggest in the world when it was commissioned in 1965.
Technicians investigated, and found a fracture in the unit’s highpressure generator rotor.
This was bad news. The obvious solution—forging a new rotor—
would take up to five years. But New York summers can be brutally
hot, making the demand for electricity surge. Going offline for
four summers was not an option.
The Ravenswood team found an innovative solution. The entire rotor
was shipped to a foundry in North Carolina, where the damaged
part was replaced and welded on to a 9,000 kg ”stub shaft.” Shipped
David Callender (above,
back in early 2009, the rotor was reinstalled in time for the 2009
left) and Gordon Bristol,
summer peak.
prepping a boiler feed
Big Allis was back in play.
so it can be overhauled.
1
pump volute for shipment
2
(1) Aleksandr Kazakov
of the Ravenswood
Maintenance Department.
(2) A view of Ravenswood
from across the East River
in Queens, New York.
(3) Clement Amanor (left)
and Ekow Oppon of the
Operations Department.
(4) Gregory Heinen,
4
3
Operations Department,
in the control room.
95
“It filters down, I mean, TransCanada always tries to settle things fairly by its
stakeholders. We’ve always dealt with people properly, and you know, in Maine,
at Kibby, we told them we’d be good corporate citizens, we did that, and they
appreciate it. There were doubters initially, and now they’re no longer doubters.
They’re thrilled to have a company of this quality as a neighbour.”
—Nick Di Domenico, Project Manager
96
Wind
1
2
3
Cartier
HOW TO BUILD A WIND FARM
In 2004, Cartier Wind Energy, then a partnership of TransCanada,
“I’ve always said that wind projects are actually more like pipeline
Innergex and RES Canada, bid on six Québec wind projects. The
projects than gas-fired power plant projects, because of the repetitive
bids were TransCanada’s first forays into wind power generation.
construction activities,” says Corey Goulet, who was responsible
“TransCanada ended up winning 740 of the 1,000 MW that were
for the construction of both Cartier and Kibby. “When you build a
awarded, which shocked everybody! We thought maybe one project,
pipeline, you have a group that clears the land, another group
two projects, we got ultimately six projects out of it, and realized
that puts a trench in, another one that lays the pipe, another that
how big wind could be for us,” says Terry Bennett, Vice-President,
welds it together, and so forth. Building a wind farm is no different.
Power Development.
When you have 73 turbines, you have the crew that goes in and
clears the land, another crew behind it builds the roads, another
Kibby
The Kibby Wind Power Project in Maine, built on the experience
installs the turbines, et cetera, et cetera. So, experience-wise, we were
well equipped to build a wind farm.”
gained through Cartier, added to TransCanada’s growing presence
in the northeast U.S. In building Kibby (shown at left, and 1 and 3,
above), TransCanada helped make a difference for ten local young
people by co-sponsoring ”Kibby Boot Camp” with the State of Maine
and TransCanada’s partners and contractors on the Kibby project.
Kibby Boot Camp (2) was part of Maine’s WorkReady program, aimed
at preparing young people for the job market.
During the six-week program, the participants received occupational
safety and health training, courses in first aid and CPR, and jobseeking guidance. They also spent much of their time on the Kibby
project site, learning about environmental research, surveying, road
construction, wind turbine assembly and management, and renewable
energy. TransCanada managers Wolfgang Neuhoff and Matthew
Nazarko acted as mentors, as did managers and technicians from
TransCanada’s partners and vendors at Kibby. All ten participants
earned Maine’s WorkReady Certificate.
97
September 2009
August 2000
October 2004
November 2005
Sundance A—PPA
Cartier Wind
Sheerness—PPA
Kibby Wind
First power purchase arrangement (PPA)
Six wind energy projects awarded by
Third PPA acquired in Alberta.
Phase 1 construction completed on wind
acquired through Alberta government
Hydro-Québec.
online auction.
farm in Maine.
September 2006
April 2005
Bécancour
September 2009
June 2000
Hydro acquisition closes
Construction completed on gas-fired
Oakville
Ocean State Power—full ownership
13 hydroelectric facilities acquired
cogeneration plant in Québec.
Positioned TransCanada to compete in
on Connecticut and Deerfield Rivers in
the New England power market.
New England.
Contract awarded by Ontario Power
Authority to build gas-fired
May 2008
combined cycle plant.
Portlands Energy Centre
October 2009
Fall 2001
September 2005
Phase 1 construction completed
Carseland and Redwater
TransCanada Power, LP sold
in Toronto; in April 2009 phase 2 was
Zephyr and Chinook
Construction completed on two gas-fired
Originally formed in 1997, by the time
completed and plant began full
Proposals announced for two high-
it was sold, the Power LP encompassed
high-efficiency, combined-cycle
voltage direct current (HVDC) power
11 power plants in Canada and the
operations.
transmission projects originating in
cogeneration plants in Alberta.
December 2001
U.S., totalling 744 MW. The Power LP
Sundance B—PPA
included both natural gas/waste
Second PPA acquired in Alberta.
heat and hydro assets.
February 2003
October 2005
Wyoming and Montana.
August 2008
Ravenswood
June 2010
Power generating station acquired
Halton Hills
in New York.
Construction continued on gas-fired
Bruce Power deal closes
Bruce Power restart
31.6% interest acquired in the world’s
TransCanada invested in multi-billion
second-largest nuclear power facility.
dollar restart and refurbishment
Coolidge
program of the Bruce A nuclear facilities
Construction began on gas-fired peaking
at Bruce Power.
power plant in Arizona.
plant in Ontario.
August 2009
“The big question is, are people willing to pay for green power, because
it’s going to cost a lot more. So at the end of the day, it’s about the consumer.”
—Russ Hantho, Power Growth
98
Crude awakening.
8
Chapter 8 Keystone pipeline captures new opportunity
99
chapter 8
Keystone pipeline captures new opportunity
Convert an old pipeline. Build a new one.
Turn the tap on.
What might have seemed like a lucky, right-time, right-place
They began considering crude oil as a business development
opportunity was, in fact, the result of thorough preparation and
opportunity, in particular looking at carrying Alberta’s oil sands
good planning.
production out of the province to U.S. Midwest markets and beyond.
In the fall of 2003, TransCanada’s restructuring was complete,
Over seven years, thousands of workers brought to life, across
the balance sheet was restored, and the company was ready to
borders, and against the odds, the Keystone Pipeline.
build more aggressively on its core businesses. Steve Becker,
a vice-president in the Pipeline Development Group, and Robert
Jones, now Vice-President, Keystone Pipelines, joined forces
to look at new project possibilities for the company.
“Our mandate was to develop new commercially-viable pipeline
projects that built on our traditional strengths and expertise,” says
Steve, now Vice-President, Business Development and President,
TC PipeLines, LP. “We also had to come up with something new that
TransCanada and our competitors had not already tried.”
Billed as the largest construction project
in North America in 2009 and 2010,
Keystone will provide TransCanada with
an almost one-third share of Canada’s
oil pipeline business. It epitomizes the
company’s disciplined, low-risk, yet
innovative approach to growth.
100
101
Lat 38ºN, Long 90ºW: June 30, 2010
Nicole Aitken at
our relationships with
Keystone’s Hartford
communities have only
Pump Station in Wood
just begun,” says Nicole.
River, Illinois. She was
“We’re here for many,
on-site to celebrate the
many years to come.”
official opening of the
pipeline. “With phase
1 now operational,
102
STAKEHOLDER RELATIONS
“In Yankton, South Dakota, the Chamber of Commerce
had a local pipeline welcoming committee.”
Nicole Aitken, Keystone stakeholder relations, Calgary
—
Keystone traverses three provinces and nine states—a vast area—much of which was new
territory for TransCanada. So the company began consulting with community leaders across the
proposed route in 2004, before the project was announced.
“At that time, the war in Iraq was on people’s minds,” says Nicole Aitken, who leads the
stakeholder relations team for Keystone. “The overwhelming majority of feedback was that
America needs a new source of oil, and if we can get it from our friends north of the border
instead of overseas, then we’re all for it.”
In the U.S. Midwest, they were also interested in the potential impact on farming and the
environment—they naturally questioned how it would be constructed, how it could impact
the soil, the groundwater, the crops, and the river crossings.
Keystone used a variety of tactics to share information. “We proactively sent invitations
to media to come to our open houses. Literally hundreds of people came to TransCanada’s open
houses to learn about the pipeline, and company representatives became local celebrities
overnight. We were the news, not just in the local community, but in the entire state,” recalls
Nicole. “We also used TV and radio campaigns to help deliver information about the project
when we encountered very vocal localized opposition, and that was very successful.”
In the end, the 15,000 landowners and other key stakeholders along the U.S. route were largely
supportive. “There were a handful of landowners opposed in the state of North Dakota and a handful
in South Dakota. Ten to twenty people out of 15,000. That’s a small percentage,” reflects Nicole.
Many communities welcomed the economic benefits of the project. “There’s one particular
individual in North Dakota I will probably remember forever and that’s Senator Curtis Olafson.
He had enthusiasm for projects that would make his community better and had foresight in
understanding how these types of projects play into the local community. He also helped ensure
we did the job right, including restoring the land.”
Now the spotlight is on the next phases of the project and times have evolved. “You can see
how social media has started to play into things and the shift in the political agenda. The news
coverage is less focused on war and Iraq and more focused on environment, looking at green
energy,” says Nicole. “It’s difficult to be talking about issues that are much bigger than just a
project. So we’re working with other organizations and key stakeholders to try to raise awareness
about facts versus fiction, particularly as it relates to energy security and supply. We try to
continue to raise awareness, correct misinformation and keep the dialogue going.”
103
What’s in a name?
“The keystone is a critical component in an
arch bridge; it’s what holds the bridge together
from bank to bank.”
—ROBERT JONES, Vice-President, Keystone Pipelines
“So in our case, if you think about the producers being one side of
the bank and the refiners being the other side of the bank on a river,
the Keystone Pipeline really represents the bridge to connect the
producers to the market, and the most critical part of that bridge is
the keystone, and that’s how Keystone got its name,” says Robert.
“In order to make a project like Keystone viable, we had to be
competitive in new markets, and early on it looked like the original
pipeline was going through Iowa. If you Google Iowa, you get
pictures of a lot of nice bridges, like in the movie The Bridges
of Madison County, which had beautiful covered arch bridges from
that area. The ironic part today, of course, is that Keystone doesn’t go
through Iowa, because in order to serve all the markets we needed
to, we had to move the pipeline into North Dakota, South Dakota,
and Nebraska.”
Robert Jones
104
Approx. lat 47°N, Long 97°W: Summer 2009
The Keystone Pipeline right-of-way
and nearby farmlands in North Dakota.
105
A MEGA-PROJECT IS BORN
Our business development team had already begun exploring the idea
when a fortuitous phone call kick-started the Keystone Pipeline.
“A gentleman from the Canadian Association of Petroleum
Producers (CAPP) subcommittee phoned our 1-800 number and left
a message asking if we would be interested in getting into the
oil pipeline business,” remembers Robert Jones, now Vice-President,
Keystone Pipelines.“ He represented a number of CAPP members
[oil companies]. It trickled through the organization to me, because
I was the only person in business development who had any crude
oil experience. I called him back and we discussed the concept
of using pipelines already built to move crude oil being developed
in the oil sands. That’s how it all began.”
There was a clear demand from the marketplace. The company could
make the project viable by converting some of its existing natural
gas pipeline to oil operations, making use of related facilities and
landowner agreements on the Canadian portion of the route.
“Somebody way back in 1957 had the vision to have the easement
agreement say we can move all hydrocarbons—not just natural gas,
not just oil,” says Robert. “That was really very fortunate, because it
would have been very challenging to renegotiate a lease agreement
with every single landowner.”
Next began the job of selling the idea both internally and externally.
“We had a hearing in Canada—it was called a Section 74 hearing,
and there were people lined up on both sides of the fence, both
supporting and opposing the project,” says Robert.
Keystone was cham-
Vice-President, Keystone
pioned by a leadership
Pipelines; Paul Miller,
team including (left
Vice-President, Oil
to right) Don Wishart,
Pipelines; and Hal Kvisle,
Executive Vice-President,
former CEO.
Operations and Major
Projects; Robert Jones,
In the end, shippers were enticed by an innovative bullet line design
that brought the crude oil non-stop from storage to refining hubs
in the U.S. Midwest as well as novel long-term contracts with fixed
tolls—previously uncommon in the oil industry.
Feat of engineering
Hundreds of engineers,
world-class engineering
2nd Row: Ken Murchie,
Back Row: Maxime
both internal and
team. Left to right:
Brando Barreto, Sandra
Beaulieu, Victor Cabrejo,
Front Row: Mauricio
Gigovic.
Peter Staszelis, Brian
Beltran, Yin Qu, Susan
3rd Row: Bill Joerissen,
Spackman, Doug
Parker, Suman Basak,
Harold Yarn, Brian
Rene Baillargeon.
Richter, Bob Lewis, Ron
external, contributed
to the design of the
Keystone Pipeline System.
Here are just a few
representatives of the
106
Knopp, Jordan Nicholson.
Brunning, Randy Wight,
Tim Johnson.
Chapter 8 Keystone oil pipeline captures new opportunity
107
Construction began in May 2008. The company’s industry-renowned
expertise in large-scale project management brought the Keystone
Pipeline home years earlier than many thought possible, with first oil
flowing through the line by June 2010.
108
KEYSTONE – by the numbers
Number of workers at peak construction of phase 1: Approximately
Pump stations: 39 pump stations built in phase 1, 29 of which were
8,000 workers in the summer of 2009.
used in the initial start-up in June 2010.
Hours worked: 23 million. That’s equivalent to one person working
Pipeline length: 6,134 km (3,812 mi.) for all phases when complete—
for 12,777 years.
about the same distance as from Calgary, Alberta to Reykjavik, Iceland,
Distance driven (by construction workers): 147 million km (more than
91 million mi.), the equivalent to driving 3,668 times around the earth.
Weight of pipe: More than 1.2 million metric tonnes (2.65 billion
or about half-way to Antarctica from Houston, Texas.
Speed of oil: About 8 km/h (5 mph)—about the same as a brisk
walking pace.
pounds, about 1.32 million tons US). That weight is equal to the steel
Commodities shipped on the line: 45 different and distinct grades of
required to build 266 Eiffel Towers in Paris, France.
crude oil can be shipped, moving in carefully separated batches along
Expected volume of oil filling the Keystone Pipeline (phase 1): 9.1
million barrels. That’s enough oil in the pipeline to theoretically fill
580 Olympic size swimming pools. After completing all Keystone
the line. Each commodity has specific yields and specific properties
for creating various oil-based products—ranging from gasoline, to
polyethylene, to roofing tar, and everything in between.
phases, there’ll be enough oil to theoretically fill 790 Olympic size
Average batch: 100,000 barrels, or 30 km (18 mi.) long; 1.1 million
swimming pools.
barrels per day upon completion.
Crude oil storage tanks at Hardisty, Alberta: 3 storage tanks, each
65 metres (215 feet) in diameter and 18 metres (60 feet) high.
Total capacity: Over 1 million barrels per day.
2
1
3
Collaborating with Aboriginal Communities
Aboriginal relations
to corral buffalo. A
with Aboriginal
stone,” used by buffalo
have been integral to
reroute was planned,
community members,
and other animals more
our operations for more
however additional
one of the sites was
than 1,400 years ago.
than 30 years. In the
archaeological sites were
excavated and artefacts
Excavation in progress
case of Keystone, the
discovered along the
preserved. Appropriate
(2, 3) and arrowheads (4)
original proposed route
reroute. TransCanada
ceremonial practices
recovered from site.
for the Hardisty West
worked closely with
were incorporated
interconnection crossed
Aboriginal communities
into the excavation
an important Aboriginal
to better understand the
process. (above, left
archaeological site,
impacts of the project
to right) Aboriginal
and an area that
on their traditional
environmental workers
traditionally was used
lands. Collaborating
(1) beside a “rubbing
4
109
1
2
Keystone commercial operations
Start-up: Commissioning
that are commissioning
Matthew Ulmer (1) and
a line from scratch is
pump stations, valves,
Mark Malinowski (2)
Building a business from a “clean sheet of paper” was a once-
“not a trivial task” says
electronics, and that all
monitor the flow of oil
in-a-lifetime opportunity for the people who developed
Erik Tatarchuk. “There
has to be synchronized
in the pipeline from the
TransCanada’s new crude oil pipeline project in record-setting
are literally hundreds
as oil moves down
new control centre in
fashion. While it could have taken anywhere from three to
of people in the field
the pipe.”
Calgary.
four years to establish commercial processes and business systems
for Keystone, TransCanada’s motivated employees did it in an
unprecedented 12 months, developing business processes
while simultaneously building commercial and control room
software from scratch.
In Calgary, oil control centre operators rely on sophisticated
systems to monitor the pipeline and pump stations along
3
the route. With an advanced leak detection system, operators
are alerted electronically to even the smallest of leaks in remote
locations and ready to respond instantly to any emergency.
“From both a physical and commercial operations perspective,
execution of the daily business of an oil pipeline is significantly
different than gas,” explains Erik Tatarchuk, who is responsible
for all aspects of daily Keystone commercial operations.
“Oil moves in batches, which is analogous to a rail car system.
In each rail car, there’ll be a different commodity, and each
commodity has to be kept separate and distinct from each other
via the hydraulic operation of the pipe. Then you have to deliver it
to the right refinery at the right time when the customers expect
Hartford Pump Station
in Illinois (3). From
it, because there is very little storage at the tail end—refineries
here, oil is directed to
usually have about two to three days of storage given their run
refineries in Illinois,
rate. We have to take oil in at a specific time to deliver it
Indiana and Michigan.
out plus or minus two days for that specific batch.” In addition,
oil is non-compressible, unlike gas, which poses different
physical operating challenges.
110
Linking secure crude oil supply with
refining markets in the U.S.
Athabasca
Oilsands
Alberta
Other Oil Pipelines
Edmonton
Manitoba
Saskatchewan
ST
EA
ND
SE
KE
TY
A
S
L
I
B
R
RD TY
TO
NI
HA DIS
R
ND
MO
SE
HA
N
KE
E
A
H
L
OY
UT
SO
S
R
OS
TO
DL
TH
NI
U
IN
O
B
M
SO
I
Calgary
N
BR
E
CA
OY
H
UT
SO
SS
LO
EY
ND
LL
BI
VA
X
FO
Lethbridge
OT
AP
PI
K
EE
CR
SY
AS
S
GR
IP
ILL
PH
Hardisty
British Columbia
Vancouver
Victoria
Tacoma
Olympia
Spokane
Washington
Saskatoon
Converted Gas Pipeline 860 km (534 mi)
T
ER
RB
HE
N
RO
CA
NA
GI
RE
AL
ND
KE
LL
FE
EN
GR
Ontario
IN
OM
OS
MO
D
I
AP
TY
CI
R
Regina
PO
IN
Y
RA
AG
NI
CK
RC
Montana
CI
FO
E
RI
Keystone Expansion
(In Development Proposed Completion
in 2013)
G
FE
Michigan
BU
TH
I
FA
E
RP
Pierre
Wyoming
E
RE
R
NE
IN
ME
O
OL
Nebraska
Salt Lake City
Nevada
D
L
RA
NT
CE
Denver
Utah
Steele City
E
rsfield
S
R
VE
RD RI A
K
FO OD
RT WO ATO
P
HA
Patoka
Saint Louis
Kentucky
No
Charlotte
A
T
CI
Tulsa
L
NG
HI
DE
Cushing
ON
Y
ER
Nashville
Tennessee
Chattanooga
Arkansas
TI
TA
L
Birmingham
Little Rock
O
EL
P
TU
Keystone Expansion
(In Development Proposed Construction
Completion in 2012)
Dallas
Alabama
Mississippi
TA
EL
D
O
OR
Fort Worth NSB
Texas
KE
LA
R
LE
TY
500 Miles
500
Austin
Houston
Houston
1,000 Kilometers
San Antonio
Y
ER
LIV
N
GA
I
RR
250
Georgia
Montgomery
Jackson
Louisiana
N
KI
F
LU
CO
Atlanta
Jackson
IN
W
South Ca
Huntsville
Oklahoma
EL
W
OM
CR
Co
Memphis
S
Oklahoma
City
IV
Chihuahua
Frankfort
West Virginia
Charleston
Louisville
Wood River
N
YA
BR
Sonora
Cincinnati
CK
Y
S
CU
El Paso
Indianapolis
L
RO
NC
Tucson
250
N
AI
AU
TP
S
Lubbock
0
MI
Springfield
Dayton
RN
Phoenix
0
N
OW
ET
L
DD
Indiana
Missouri
BU
Ontario
IA
AL
TR
N
CE
PE
PO
New Mexico
RY
BU
LIS
SA
Jefferson City
Kansas City
Wichita
Santa Fe
Albuquerque
NA
TI
HO
Keystone
Cushing Extension
(Under Construction Expected In-service
in 2011)
Las Vegas
EY
RN
TU
Topeka
Y
LE
RI
Kansas
Colorado Springs
ornia
Mexicali
Y
E
NC
RA
VE
SE
B
T
CI
E
EL
ST
o
San Diego
ER
ET
EX
Colorado
Arizona
TY
CI
Lincoln
LE
EE
CA
ST
NE
SE
Ohio
Columbus
Illinois
ILB
W
Penns
Toledo
Fort Wayne
Omaha
ER
TY
CI
Cleveland
Des Moines
Y
T
CI
VI
DA
N
SO
IC
ER
Detroit
Chicago
AN
ST
ON
NS
KI
AT
Sarnia
Lansing
Madison
N
TO
C
Grand Rapids
Milwaukee
Keystone Pipeline
F
N
TO (Construction Completed
NG
I
RT
HA
in 2010)
Iowa
O
RD
MU
Cheyenne
Flint
Wisconsin
N
MA
W
Reno
Carson City
o
L
RO
Roch
Buffalo
Minneapolis
-Saint Paul
EL
SW
Toronto
Green Bay
CA
O
AK
HA
ER
NT
South Dakota
O
AL
FF
N
Idaho
Minnesota
Y
NE
R
IN
RD
HA
EN
DD
LU
N
LO
L
FA
M
SO
AN
R
RT
Bismarck
AI
E
RN
VE
LU
North Dakota
LE
PR
Boise
G
R
BU
ED
P
RT
Oregon
T
H
FO
Helena
Winnipeg
ET
K
AS
E
tro Area
m
AN
RM
CA
LE
L
VA
E
RI
AI
PR
LA
E
AG
RT
TY
ER
LIB
D
N
LA
DE
ON
Mobile
I
AT
ST
Tallahassee
Baton Rouge
ER
D
NE
O
New Orleans
Nederland
We Are
Here The Transcanada JOurney 1998–2010
Port Arthur
Beaumont
Flo
111
Tampa
Clearwater
Saint
Petersbur
February 2005
September 2007 March 2008
Project first proposed
NEB provided approval to construct
U.S. Presidential Permit received
To link Canadian crude oil with U.S.
and operate
demand (3,461 km/2,151 mi.).
The NEB also approved the toll
May 2008
methodology and tariff.
Construction began
July 2008
November 2005
MOU signed with ConocoPhillips
October 2007
Commits ConocoPhillips to ship crude
Contracts worth US$3.0 billion
Expansion announced
oil on the proposed pipeline and
awarded
To serve the U.S. Gulf Coast—additional
gives them the right to acquire up to
For major materials and pipeline
capacity of 500,000 barrels per day
50% ownership.
construction contractors. Work
(2,673 km / 1.661 mi.).
continued to secure land access
January 2006
agreements.
June 2009
January 2008
TransCanada purchased ConocoPhillips’
Firm, long-term contracts of 340,000
Final Environmental Impact
share in the project.
barrels per day (18-year average
Statement
Long-term commitments secured
from shippers
duration).
Sole ownership announced
From the U.S. Department of State.
After nearly two years of detailed
FebrUary 2007
analysis of the project proposal by
June 2010
Oil starts flowing
“Tap turning” ceremony marked arrival
National Energy Board (NEB)
more than a dozen U.S. federal agencies
of first crude oil at Wood River and
approved gas pipeline conversion
and other interested stakeholders,
Patoka, Illinois.
to oil
the impact statement indicated the
Involved conversion of approximately
pipeline would result in limited adverse
860 km (530 mi.) of existing Canadian
environmental impacts.
Mainline pipeline facilities from natural
gas to crude oil transmission service and
January 2008
construction of approximately 370 km
ConocoPhillips
(230 mi.) of new oil pipeline, terminal
Acquired 50% ownership interest in
facilities at Hardisty, Alberta, and
the project.
pump stations.
“People wanted to work for TransCanada because we have a tremendous
reputation attracting and retaining highly qualified people and providing
a very enriching workplace.”
—Paul Miller, Keystone Pipelines
112
The call of the north.
9
Chapter 9 Partnerships, promise, potential
113
chapter 9
Mackenzie Valley and Alaska.
For more than 30 years, TransCanada has had its sights set on two
Further north, 2008 saw TransCanada named the license-holder
northern lights.
by the State of Alaska under the Alaska Gas Inducement Act (AGIA).
The company’s role in the formation of the Aboriginal Pipeline Group
in 2000 represented a unique business development investment
opportunity in the yet-to-be-approved pipeline from the Mackenzie
River delta in the Northwest Territories. This unique communitybuilding and investment coalition continues today, and represents
An open season was held between April and July 2010, with
partner ExxonMobil. The goal is to build and operate a pipeline
system that will make possible the development of Alaska’s vast
North Slope natural gas resources, and provide a reliable, clean supply
of domestic energy for North American or international markets.
the first time that Aboriginal groups in Canada would participate
in an industrial project of this scope.
North of 60º: February 2009
Yukon Quest (opposite
Alaska. As a key player
“We have never wavered
page), a 1,000-mile
in the Alaska Pipeline
in the conviction to
dogsledding race held
Project, TransCanada is
persevere with
annually between
proud to sponsor this
Mackenzie and Alaska,
Whitehorse and
event and showcase
even through all the ups
Fairbanks, is a unique
northern culture,
and downs of the last 10
event highlighting the
tradition and character
years on both.”
cooperation, friendship
across North America.
—Dennis McConaghy,
and shared values of
Executive Vice-
residents in Yukon and
President, Corporate
Development
114
“Hurry hard!” An
unofficial TransCanada
curling team stops
along a northern ice
road. Left to right, Bill
Arthur, Rick Gateman,
Kristine Delkus, David
Kohlenberg, Hal Kvisle.
116
a sweeping tour of the north
I n Inuvik, every February there is an oilman’s curling bonspiel.
Given the never-ending nature of the Mackenzie pipeline
project, it is valuable to reinforce our continued interest in the
north by touching base from time to time with our northern
partners at such events.
A few years back, Hal, an avid curler and accomplished skip,
suggested that I put a team together for the bonspiel. On the
Saturday of the tournament we had most of the day off, so Hal says
why don’t we drive to Aklavik? The way you get there is you drive
on the frozen Mackenzie River delta, 112 kilometres along an ice
road, which I am nominated to do, in our rented Chevy Blazer, with
a badly cracked windshield and bald tires. You’re mostly above the
tree line, and with the wind howling in off the Beaufort Sea there are
times when your entire world is completely white. At first I tried
to keep up with the ‘local’ driving in front of us, but when we started
to slide a bit I had visions of being upside down in a snowdrift with
the CEO dangling from his seat belt—so we just took our time!
By total coincidence, in Aklavik it turns out that a new curling rink
Rick Gateman
had just been opened the day before and many of the locals were
busy with their own bonspiel. As we seemed to be the only nonaboriginal folks in the entire community we were a bit of a curiosity
to them! We watched as they raced dogsleds up and down the frozen
delta tributaries. It was far from being a touristy thing, it was just part
of their culture. This was late February, and they were just coming
out of a period of winter darkness when the sun never gets above
the horizon at all—towards March you start to see the sun a bit more.
We drove past the school there, and all the school kids had put little
posters in the windows: “Welcome Back Mr. Sun!”
A recollection of an interesting journey by
Rick Gateman, Vice-president, northern development
117
ALASKA
“We brought to the table a tremendous amount of credibility from our past history
on this project and our history as the largest pipeline company in North America.
TransCanada provides equal access to the original customers as well as more recent
customers—big and small—and that was very appealing to Alaska.”
—Tony Palmer, Vice-President, major projects Development
In 2010, the Alaska Pipeline Project conducted the first natural gas
pipeline open season in the history of the North Slope—resulting in
a number of industry players bidding for significant volume on the
pipeline. This represents a major milestone in the development of
Alaska’s vast natural gas reserves.
Alaska – By the Numbers
Length of proposed pipeline, from a new gas treatment plant
in Prudhoe Bay, Alaska to the Alberta border: 1,700 mi. (2,737 km)
Number of Alaskans already employed on early stages
of the project: 110
Projected capacity of the new pipeline: Up to 5.9 billion cubic feet
Diameter of pipeline: 48 inches
(left to right) Carla
Birthwright, both of
Dozens of people have
obtained in the summer
Kudrenecky-Nagy,
ExxonMobil, are also
contributed to the
of 2008 were (left to
Ignacio Monterrubio,
part of the Alaska
Alaska Pipeline Project
right) Joyce Donnelly,
Christina Mockridge.
Pipeline Engineering
over the past several
Vincent Lee, Tony Palmer,
Dan Lillig and Rhys
team.
years. Among those
Donna Friesen, Jack
gathered to celebrate
Beattie, Tom Babuk.
state legislative approval
118
Mackenzie
“In my first interview, Fred [Carmichael, of the
APG] said: ‘My vision is to create the opportunity for
Aboriginal youth to complete their education…
to create a self-sufficient Aboriginal population.’
It probably won’t be accomplished in my lifetime,
but APG is a first step.”
Proposed PipeLine Routes
North Slope Basin
Arctic Ocean
Prudhoe Bay
Gas Treatment Plant
Beaufort Sea
Proposed Alaska
Pipeline Project
Arctic
National Wildlife
Refuge
Ivvavik
Yukon Flats
National
National Wildlife
Park
Refuge
Vuntut
National
Park
MacKenzie Basin
Banks Island
Tuktoyaktuk
Fairbanks
Inuvik
Anchorage
Victoria
Island
Valdez
—Bob Reid, President,
A boriginal Pipeline Group
(Formerly with TransCanada).
Norman Wells
Great Bear Lake
ie River
Mackenz
Whitehorse
Watson Lake
Juneau
Through our support for the
Aboriginal Pipeline Group (APG),
Proposed Mackenzie
Pipeline Project
Northern limit of
wooded country
TransCanada is invested in the
Mackenzie Gas Project, a pro-
Fort Simpson
posed 1,196 km (748 mi.) natural
Yellowknife
gas pipeline system along the
Great Slave Lake
Mackenzie Valley of Canada’s Northwest
Territories to connect northern onshore gas fields with
North American markets.
Lake Athabasca
Pacific Ocean
Fort St.John
The APG was formed in 2000 to represent the ownership interest
Boundary Lake
Dawson Creek
Grande Prairie
Southern reach of
continuous permafrost
of the Aboriginal peoples of the Northwest Territories in the
proposed Mackenzie Valley pipeline. The APG’s involvement in the
Mackenzie Gas Project represents the first time that Aboriginal
Edmonton
groups in Canada will participate as an owner in a major, multi-billion
Southern reach of
discontinous permafrost
dollar industrial project. In exchange for providing funding to the
project definition phase, TransCanada earns a number of acquisition
Caroline
Vancouver
and expansion rights together with a financial return if the project
Calgary
Victoria
goes ahead. The project is currently awaiting regulatory approvals,
Regina
but if development of this pipeline goes forward, it would connect
Monchy
would be converted
100W
110W
115
W
120
W
Kingsgate
125
W
30
W
Gulf of Alaska
The Alaska Pipeline
The gas would then be
Project open season in
delivered on existing
to liquefied natural gas
2010 offered two options
pipeline systems serving
in a facility to be built
to potential shippers.
major North American
by others and then
The first (dark green
markets. The second
delivered by ship
dotted line) is a pipeline
(light green dotted line)
to North American and
through Alaska, Yukon
would transport natural
international markets.
Territory and B.C. to
gas to Valdez, Alaska,
Alberta, about 1,700
about 800 miles
miles (2,737 km).
(1,287 km), where it
with TransCanada’s system in Northern Alberta.
119
APRIL 2010
MAY 2003
OCTOBER 2004
Full ownership of Foothills
Imperial Oil filed application
Open Season begins on
Pipe Lines Ltd.
Application filed to National Energy
Alaska project
Integral addition to move future
Board (NEB) to construct and operate
The Open Season Plan, the first to
northern gas to North American markets;
the Mackenzie Valley Pipeline.
be filed in the history of the North
Slope, was filed in January 2010. In April
Foothills holds certificates to build the
Canadian portion of the Alaska Highway
NOVEMBER 2007
information was provided to potential
Pipeline Project.
AGIA application filed
shippers in Alaska and Canada on
TransCanada files an application under
anticipated engineering design,
JUNE 2003
the state’s AGIA. Four other parties file
commercial terms, estimated project
Funding announced for
competing applications.
costs and timelines.
TransCanada agreed to anticipated
AUGUST 2008
JULY 2010
funding of approximately $80 million
Alaska Legislature approves
Initial Alaska Open Season concludes
for APG to participate in the project
TransCanada license for Alaska
Received multiple bids from major
Aboriginal Pipeline Group
definition phase of the Mackenzie
Pipeline Project
industry players and others for
Gas Pipeline. TransCanada is given
License facilitated continuing commercial
significant volumes.
an option to obtain an interest in the
negotiations with potential shippers.
pipeline at the decision to construct.
JUNE 2009
MARCH 2004
Agreement reached to team with
Alaska pipeline leadership
ExxonMobil on Alaska project
position suggested
Agreement on initial project terms
TransCanada announced intentions to
helped to progress the project under
assume a leadership position on
AGIA.
the development of an independently
owned pipeline project in Alaska,
in addition to their long-standing
leadership of the Canadian portion of
the project.
“Now, we’re better at doing than just dreaming and planning
of what we might be.”
—Steve Becker, Pipeline Business Development
120
Making it all happen.
10
ChaPTER 10 It’s the People Who are Transcanada
121
chapter 10
the people who are TransCanada
Doing big things that matter.
The people of TransCanada clearly have a track record of dreaming
big, thinking big, and doing big things.
“We have one of the best workforces,” says Russ Girling, CEO.
“They’re capable, professional people who know how to get their
jobs done. They’re collaborative. Honest. They have incredible
dedication, and commitment. And they’re just great people to work
with. I can’t say enough about how amazed I am at the things
that they accomplish, and the magnitude of the tasks and the
challenges they take on. Even when we have our rough times, we
pull together, dust ourselves off, and go back and do it again.”
At TransCanada, every person makes a difference, and every person
matters. In the following pages, you’ll meet just a few of our people,
and hear just a few of their stories. But it’s a tribute to all of the
people who are TransCanada.
Lat 40ºN, long 73ºW
“Having integrity in everything you do
and having trust in the people that
work alongside you is important. In a
high-energy environment with lots
of its own dangers, we have to protect
not only ourselves but the people that
work at the station. We need to trust
each other and help each other out.”
—Jawad Masud, Ravenswood
maintenance, New York
122
Willie Weich (left)
and Jim Thompson
at Winchell Lake
Compressor Station,
near Cremona, Alberta.
124
SAFEty 24/7
ustin Enright, a safety specialist for Northern Border
D
pipeline, is a volunteer firefighter in his hometown of Port
Byron, Illinois. In 2008, he received a hero’s award from
the state for saving a man’s life using an automated external
defibrillator (AED), which he learned to use through
TransCanada’s safety training.
PREPARED FOR EMERGENCY
Dustin was working in his garage one night in 2007 when he heard
the rescue call. He hurried to the scene, not far from his home.
“The victim was unconscious and not breathing when I arrived,” says
Dustin. “I did a patient assessment as trained in the class and radioed
for an AED to be brought to the scene right away.”
Dustin began to administer CPR and continued until the AED arrived.
“I grabbed the unit, ripped off his shirt, and applied the shock pads,”
says Dustin. “The shock worked.”
Dustin Enright
An ambulance took the patient to hospital. “I was very happy
to learn that he made it and was in stable condition later that night,”
says Dustin.
Several months later, Dustin was one of about 40 Illinois citizens to
receive the state’s ‘Heartsaver Hero’ award.
“This award makes me feel proud to work for a company that
has such a strong focus and commitment to safety,” says Dustin.
“Many companies might say they have a good safety program, but
TransCanada backs it up. It’s nice to know that at TransCanada
you are surrounded by people who have everyone’s safety, including
the public, on the forefront of their mind.”
ChaPTER 10 the People Who are Transcanada
125
Integrity
“Our customers have told us time and again through
surveys and conversations that reliability is the most
important thing, which is all tied up in responsibility
and integrity. So at the end of the day the most
important thing to me is to be able to tell them that
TransCanada will do what we say we’re going to do.
The customers trust our word.”
—Hang Nguyen-Xuan, transportation services
accounting, Houston
Gary Charette
“Whether I’m working with my team in Brooks or on
project teams, the people are just excellent, and I think
the biggest reason for that is they all have a high degree
of personal integrity. Collaboration comes, I think,
if you have integrity.”
“I don’t want to work in an environment where my
values don’t match company expectations, and I feel
very comfortable with TransCanada that integrity
isn’t just words on a piece of paper, it’s actually the way
we do business.”
—Gary Charette, U.S. pipelines commercial
operations, Houston
—Duane Hauer, field operations, Brooks, Alberta
“On a personal note, integrity is about holding
myself to high ethical standards and also committing
and delivering on the promises that I’ve made.”
—Joe Williment, facilities maintenance, MAPLE /
Niagara, Ontario
“In my line of work we have to deal a lot with customers
in fairly contentious situations—in rate cases for
example. Being honest and being open about your
position is important. Having that integrity to be honest
in situations where it’s tough, it’s important.”
—Ben Johnson, law and regulatory affairs (rates),
Houston
126
Joe Williment
LAT 51°N, LONG 114°W: MAY 2009
Bob Semeniuk, who was
with the Airdrie office,
shares information about
the Alberta System
jurisdictional change
with locals at an open
house in Cochrane,
Alberta.
127
Engaged
“I spend more time with my TransCanada family than my home family, and so you have to
like where you are. I like the people I work with—they are motivated and intelligent, they are fun to
work with, they are respectful, they are collegial. We have issues from time to time, as you
would expect anywhere, but it is a very comfortable place to work. I don’t go into Sunday night
with trepidation that Monday morning’s coming.”
—Kristine Delkus, pipelines and regulatory affairs, Calgary
“I think it’s what you do every day that makes up the culture of an
organization. It’s more in your actions than what you put on paper.”
—Wendy Hanrahan, human resources, Calgary
“We challenge our people to come up with new
“Regarding corporate culture, I think there are a
ideas, and to bring them forward. We can’t rest on
lot of sharp people. I think TransCanada has done
our laurels or just let the asset do what it’s going
a good job of putting the right people in the right
to do—we have to try to add value, given what we
places. I think it’s well thought out.”
—John Roscher, law and regulatory affairs
see in the market every day. That’s an engaging
environment for people. People are happy to be here (rates and tariffs), Houston
and learning.”
—Brandon Anderson, gas storage, Calgary
128
PASSIONATE
As an Official Supplier of the Vancouver 2010 Olympic and
Paralympic Winter Games, TransCanada offered opportunities for
employees to “share in the experience” every step of the way.
During the year-long countdown, employees from all areas
participated in activities such as weekly trivia competitions, torch
relay celebrations and a contest to win a trip to the games.
Local celebrations were also held across North America during
the actual 16-day event.
Ten employees shared the once-in-a-lifetime opportunity to
represent TransCanada in the 2010 Olympic Torch Relay.
“When I saw the torch approaching me, it was a surreal moment,”
recalls John Coutts of our Ile des Chênes, Manitoba compressor
station, one of the torchbearers selected from among hundreds of
employees nominated across North America. “It was just a wonderful
experience, very emotional.”
Joan Muzzey of Tinley Park, Illinois agrees. On one of two special
LAT 41°N, LONG 88°W: FEBRUARY 2010
legs of the Torch Relay—one TransCanada employee literally passed
the flame to another—Joan passed the torch to David Haag of
In Sandwich, Illinois, the
Joan Muzzey (centre),
Portsmouth, New Hampshire. Both U.S. based employees traveled to
Lake Michigan Region
one of TransCanada’s
held a Hawaiian beach
employee torchbearers.
Mont-Joli, Québec to complete their portion of the Relay.
“To be able to hand it off to a fellow employee was just, to me,
party with special guest
the best!” Joan says.
1
2
17 employees and their
Pictured here is winner
and Lisa Ma (2), from
guests won a trip to
Dana Hatch (1),
Calgary, with husband,
the Games courtesy of
from Westborough,
also at women’s hockey.
TransCanada.
Massachussetts, at
women’s hockey,
129
Connected
It’s the largest gathering of TransCanada people you’ll find and it
The first-ever U.S. Pipelines employee meeting was held after
happens twice a year. During employee forums people across North
the consolidation of the company’s U.S. natural gas pipelines.
America connect with each other and hear about the business from
The meeting was held in Houston and webcast to employees and
the CEO and other executives. More than 1,000 people typically
contractors across U.S. Pipelines.
attend the events in Calgary with hundreds more participating in
Houston and other locations via webcast.
1
3
2
(clockwise) Employees
Ryan McGrath, Blair
ensure the live streaming
technology to bring
Kim Groves and Alenda
mingling at the Telus
Purvis, and Gisele
webcast goes smoothly—
people closer together
Hanson (3) hand out
Convention Centre in
Aparicio-Hull (2) work on
just one example of
despite the great physical
travel mugs featuring
Calgary (1).
the technical set-up to
how TransCanada uses
distances between us.
TransCanada’s four values.
130
4
5
6
(top left to right) Mike
Karen Leal and Bobi
Jackson, Yasin Vohra and
Jones (5) share a laugh
Michael Barnes (4) man
prior to the event (6).
the technical table.
131
CARING
LEADING THE WAY
In 1999, employees shouted their $1.25 million United Way campaign
success from the half-built rooftop of the company’s new tower
in downtown Calgary (1). Ten years later, after more than 50 years of
commitment to the United Way, TransCanada and its employees
were awarded the ‘Embracing United Way’ award.
The award, from United Way of Calgary and Area, recognizes
ongoing support for a decade or more and is given each year to an
organization that has embedded the spirit of United Way into its
culture. TransCanada may have earned extra points for its support
of almost 100 United Way offices across North America.
“I like the fact that we help others in our community, in our own
backyard,” says Angelique Bentivoglio, who works at the Maple compressor station in Ontario. “I can actually go out in the community
1
and see how we help others. My family has been involved as well.”
2
3
4
5
Employees, including
United Way parade in
tradition in Calgary for
(4) came out in support
Way in Houston. The
more than $2.5 million
campaign chair Holly
September 2009 (2).
many years. In 2009, the
of the event. Liz Palacios
2009 campaign kickoff
company-wide.
Yaschuk (second from
Johanna Peters and
campaign kick-off had
and Lena Treviño (5)
event drew thousands
left in front), carry the
Judy White participate
a change of scene and
represent TransCanada at
to the Toyota Center
TransCanada banner
in the United Way fun
moved indoors. Special
a gathering of corporate
downtown. TransCanada’s
at Calgary’s city-wide
run (3), a TransCanada
guest ‘Harvey the Hound’
sponsors of the United
2009 campaign raised
132
hammer time
About 10 days every year, TransCanada employees can be found
with hammers and hardhats on Habitat for Humanity construction
sites. “You know your efforts are going into something that’s going
to be around for many years to come and those efforts change
someone’s life for the better,” says Steve Elliott, former Calgary build
coordinator. “It seems an excellent way for TransCanada to have a
long-lasting impact in the community.”
In fact, a Habitat for Humanity build project was the first community
activity undertaken by Houston employees following the ANR
pipeline acquisition in 2007. In November, 2007, more than two
1
dozen Houston employees helped with the construction. The keys
were turned over to the new homeowner on May 15, 2008. “We
believe this is one way that we can have a real impact in a community
where we have strong ties,” says Catharine Davis, U.S. Pipelines.
“Our employees rolled up their sleeves and showed that they are
generous and caring people by their actions.”
2
3
4
6
5
Framing “TransCanada
Jay Lewis (3); Lena
House” in Calgary in 2003
Treviño, Margaret Kidd,
(1, 5, 6). Construction in
Amy Sowa, and Carol
Houston in 2007 (2, 3, 4):
Wehlmann (4).
Tom Janish (2),
133
Emily Zhang is pictured
here outside the
TransCanada building
in Calgary.
Achieving
As a child, TransCanada engineer Emily Zhang was
taught that the only limits are those you place on yourself.
Selected by the Women’s Executive Network as one of
Canada’s Most Powerful Women in 2008, at the age of only
26, Emily has become a national role model for what can
be achieved with talent, foresight and determination.
FUTURE LEADER
Emily joined Engineers Without Borders in 2000, when she was
studying for her Mechanical Engineering degree at the University
of Calgary.
She now serves as co-president of the Calgary chapter of the
organization, where she helps lead a team of 42 executives and
directors and engages hundreds more in the Calgary community
through awareness activities. The Network honoured Emily in
the ‘Future Leader’ category for her role.
The Calgary chapter’s activities have focused on the African
countries of Malawi, Burkina Faso, Ghana and Zambia, as well as
on promoting global citizenship in Canada.
Her advice for others is simple: aim high, be true to yourself,
and surround yourselves with mentors who can help guide you.
“I’ve been taught that there are no limitations, that the only
limits are those you place inside yourself,” she says. “Don’t be afraid
to jump at new opportunities and see where they may lead you.”
135
Committed
“It’s very easy to destroy a good reputation. One of
the pieces of advice I typically give my clients is ‘do the
right thing.’ If it feels right then that’s what you should
be doing.”
—Lauri Newton, law and regulatory affairs–
U.S. pipelines land and environment, Houston
“It’s a commitment to high ethical standards, it’s a
commitment to safety, it’s a commitment to stewardship
of environmental resources. In an engineering role,
there are plenty of opportunities for shortcuts and by
and large it’s maintaining high ethical standards that
keeps you from taking undesirable shortcuts. Obviously
we’re in the business to move gas, but it’s not worth
it if you can’t do it safely.”
—Garrett Word, U.S. pipelines system & capacity
management, Houston
Garrett Word
136
Kibby Wind Farm is surrounded by
scenic hills in Maine; it will be the
largest wind power development in
New England.
“The thing that really excites me about the company is that we’re
right in the middle of what is the most important political and
social debate in the world, which is how do we continue to
provide affordable, reliable energy to our citizens in a way that
heals the planet? We do that in everything we do—our natural
gas is cleaner than coal, we’re doing electric transmission
projects that will carry clean energy to large markets that need
it. So we’re looking for practical solutions to one of the most
intractable problems facing humanity.”
—Scott Farris, public sector relations, Portland
137
As of August 2010, TransCanada had
about 4,200 employees in 3 countries,
7 provinces, 31 states, and almost
Gen Y
13%
250 locations.
GENERAtions
In the last five years, the number
of Baby Boomers in our workforce has
Baby
Boomers
54%
Gen X
33%
CANADA
2,525 people
Calgary
1,800 people
declined by 11 percentage points. Gen Y
has increased by 6 percentage points.
Commitment to diversity thinking long term
In 2010, TransCanada was named one
About 60% of our people are in
of Canada’s Best Diversity Employers in a
Operations and Major Projects—their
national awards program sponsored by
work is largely devoted to ensuring
Maclean’s magazine. In particular, the
the long term reliability, safety,
award recognized the company’s efforts
and sustainability of our pipelines,
to support women in the workplace,
power plants, and other facilities.
UNITED STATES
1,630 people
and hire and train Aboriginal workers.
in the field
Experience and dedication About 40% of our people work in the
On average, our employees have about
field. Outside of Calgary, Houston, and
13 years of service and only about 3%
Ravenswood (New York), the average
leave or retire annually. Slightly more
location has 7 people.
MEXICO
9 people
Houston
420 people
than 25% of our current employees were
part of the TransCanada-NOVA merger.
doing big things
In 2009, we had $9.5 million in assets
per person and generated $333,300 in
net income per person.
A NEW ERA OF GROWTH: EMPLOYEE POPULATION FROM 2003−2010
4500
4000
4000
3375
3500
3000
2500
4200
2200
2400
2440
NOVEMBER 2004
GTN
acquisition
APRIL 2005
U.S. hydro facilities
acquisition
2000
1500
1000
500
0
DECEMBER 2003
Restructuring
complete
138
FEBRUARY 2007
ANR /
Great Lakes
acquisition
AUGUST 2008
Ravenswood
acquisition and
continued growth
JUNE 2010
Here we are.
Here WE ARE The Transcanada JOurney 1998–2010
1
Close-up of gas control
screen.
2
Here we are.
Twelve years ago, TransCanada was a very different company than it is today. And yet,
many things have not changed. This book tells the story of a group of people with steadfast
vision, discipline and commitment who built a business that customers choose to partner
with, shareholders value, communities welcome as a good neighbour, and those who work
here are proud of.
This company has changed the energy map in North America. Millions of people
benefit from our role in providing energy across the continent. This role is often largely
invisible, and yet, we have only to look at still-developing parts of the globe to appreciate
how essential reliable and safe natural gas, oil, and electricity supplies are to our
well-being.
We could not have reached this point without the spirit and resilience of the people
who persevered when times were tough—and have stayed focused during our current era
of rapid growth.
Looking back, the challenging times have helped define the “personality” of the
company and the values we espouse. We will remember and learn from our history and
remain on course—our map will evolve and our vision will continue to guide us.
In the words of CEO Russ Girling, “We understand who we are and what we are.
And that’s not about to change.”
141
TURNAROUND STORY – by the numbers
TransCanada (TRP)
TSX
Debt and equity issues
(CAD$)
45
July 1998: TransCanada-NOVA
merger closes
40
35
30
1
December 1999: Divestiture program
and dividend cut announced
25
December 2000: More than
$2B of assets divested by year-end
February 2003: Bruce Nuclear
Power investment
5
20
4
15
3
2
10
December 2001:
Enron files for banruptcy
5
1998
1999
2000
2001
2002
2003
We define success in many ways—safety, efficiency, reliability, and
Between 2008 and 2010, during the height of global financial crisis,
reputation, to name a few.
TransCanada issued more than $20 billion in debt and equity to
But the ultimate measure, of course, is how the company is valued
in the marketplace. Our share price tells the story of TransCanada’s
turnaround.
From its post-merger low in 2000, TransCanada’s share price has
recovered and grown steadily. Sticking to the strategy mapped out
in 1999, TransCanada focused on its core pipeline, power, and gas
storage businesses within North America.
finance the expansion and growth of its core businesses. (Green dots
on graph indicate debt and equity issues; see details on facing page.)
“Probably the toughest period in the entire time that I’ve been on
the Board was through the latter part of 2008, when we had a pretty
significant financial meltdown,” says Barry Jackson, current Board
Chair. “But the support for TransCanada in the marketplace was
phenomenal. I’d say there weren’t more than a handful of companies
in North America who could have done what TransCanada did. That’s
a market endorsement of the caliber of the individuals, the caliber of
the strategy, and the caliber of the execution under that strategy.”
142
2004
TSX
16,000
April 2005: TC Hydro facilities
acquired in New England
June 2010: First crude oil delivered
from Alberta to Illinois via
Keystone Pipeline
August 2008: Ravenswood New York
power acquisition closes
14,000
8
9
10
11
10,000
7
6
12,000
8,000
September–October 2008:
World financial crisis reaches peak;
Lehman Brothers files for bankruptcy
6,000
4,000
December 2006: ANR Pipeline/
Great Lakes Gas Transmission
acquisition announced
November 2004: GTN pipeline
acquired in Western US
2005
2006
2007
2,000
2008
2009
2010
Financing for growth
Barry Jackson
Debt and equity issues shown as green
March 2006 – US$500M senior notes
August 2008 – US$1.25B senior notes
dots on the graph above:
September 2006 – $400M medium term
November 2008 – $1.2B common shares
June 2003 – US$350M senior notes
notes
November 2003 – $450M medium term
October 2006 – $400M medium term
notes
notes
February 2004 – $200M medium term
February 2007 – $1.7B common shares
notes
May 2007 – US$1.0B junior subordinated
March 2004 – US$350M senior notes
notes
October 2004 – US$300M senior notes
October 2007 – US$1.0B senior notes
January 2005 – $300M medium term
May 2008 – $1.3B common shares
notes
August 2008 – $500M medium term
January 2006 – $300M medium term
notes
notes
January 2009 – US$2.0B senior notes
February 2009 – $700M medium term
notes
June 2009 – $1.8B common shares
September 2009 – $550M preferred
shares
March 2010 – $350M preferred shares
June 2010 – US$1.25B senior notes
June 2010 – $350M preferred shares
143
As he looks forward in his
new role as CEO, Russ Girling
has history on his side as he
continues in the footsteps of
those leaders before him.
The next chapter
“It’s a great thing to be part of a team
that’s winning, enjoying it, and getting better
all the time.”
—Russ Girling, CEO
It’s rewarding to know that the business strategy TransCanada
committed to just over a decade ago remains essentially unchanged
today. Our work to build a first-class North American energy infra
structure company is on the right track.
“Our primary objective is to build long-term value for our
shareholders, many of whom are also our employees,” says Russ.
“So it’s in all our best interests to succeed. Ten years ago, we decided
to focus only on businesses we know and understand; developing
them, operating them, and building them. TransCanada today is large
and diversified, but equally focused on operation and management.
“We are able to conceptualize, negotiate, design, construct, operate,
and maintain this large-scale infrastructure like nobody else can.
And that’s what it takes. It takes the ability to do all those things
exceedingly well. We will only be successful going forward if we
never forget what got us to where we are today: hard work, skill and
disciplined execution.”
Russ also emphasizes another critical ingredient: “The more fun
you have at your job, the more success you have. And that to me is
important,” he says. “If everybody performs at their best, they’re
going to be the happiest, and the most satisfied, and that will drive
the performance of the company.”
145
just the beginning…
There could have been
and which represents
no better last act for
TransCanada’s vision
Hal Kvisle on the day of
and ability to seize
his retirement as CEO
opportunity. Keystone
on June 30, 2010, than
symbolizes both how
to turn on the tap for
far we’ve come, and the
the Keystone Pipeline,
promising future that lies
a project he believed
before us. The journey
in from the beginning,
continues…
Special thanks.
Thank you to the innumerable people who participated in interviews,
donated memorabilia, contributed photos, helped research and
provide historical details, and otherwise supported this project. It is
your contributions that have made the stories within these pages
come to life.
acknowledgements
TransCanada Project Team
Forwords Communication Inc.
Photography
Editor
Project and Creative Lead
Marnie Burkhart, Jazhart Studios
Heather Opseth
Jennifer Wah, abc, mc
Managing Editor
Writer/Editorial Consultant
Shela Shapiro
Allan Jenkins
Contributors
Production Manager
Gisele Aparicio-Hull, writer and
Spencer MacGillivray
reviewer
Creative Director
Michael Barnes, writer and reviewer
Matt Warburton fgdc
David Dodson, reviewer
Art Director
Reina Fonseca, associate
Linda French, legal counsel
Dawn Jenkinson, photography
Dan Bannister, One Word Photography
the Calgary Herald, photographer
Photography
David Lazarowych
Paul Connor, Rocky Point Productions
Bruce Forster, Bruce Forster
Photography
Winter Ghostkeeper
Todd Korol, Todd Korol Photography
Graphic Designers
Jim Larime
Deana De Ciccio
Rob Liddle
Kat McCulloch
coordination
Dennis Lanthier, interviewer and writer
Printing
Jeff McIntosh
Joseph Lohan, writer and reviewer
Rhino Print Solutions
Shannon Oatway
Kimberly Molnar, editorial assistant
Eric Willis, mapping
Executive Sponsor
Patrick O’Connor, Patrick O’Connor
Hurricane Ike satellite image, page 69,
courtesy of NOAA Satellite and
Information Service
Disaster relief photo, page 69, courtesy
of the American Red Cross
NASDAQ opening bell photo, page 71
© 2009, The NASDAQ OMX Group, Inc.,
printed with permission
Keystone photos, pages 104/105,
courtesy of Bechtel Corporation
APG mug, page 119, used with
permission of the Aboriginal Pipelines
Group
Photography
Salvo Photography
Sarah Raiss
Kathleen Scott
Project Advisor
Jay Stevens
Wendy Hanrahan
shareholder meeting photos, pages
16-17, used with permission of
Brian Buchsdruecker, Bookstrucker
Brandon Brind
Leanne Romak
TransCanada PipeLines and NOVA
Media acknowledgements
Page 12, reference ‘marriage made
in heaven and shotgun wedding’ –
Maclean’s, February 9, 1998
Daniel Vaillancourt, Patrick O’Connor
Page 16, reference Financial Post,
Photography
June 27-29, 1998
Daniel Wood
TransCanada Archives
Page 16, reference the Calgary Herald,
June 30, 1998
Page 17, reference the Calgary Herald,
June 30, 1998

We are here. The TransCanada Journey 1998

Transcription

Similar documents

flyer - Centennial Classic Arms

pETROSANTANdER (uSA) INC.

Company Name Cleansing And Normalization

Ojinaga – El Encino Gas Pipeline

JOSOS project completed (PDF Document)

North East Mainline Customer Meeting

benefits of Corresponding Membership

1 oleum and sulfuric acid pipeline safety maintenance presented by

At a Glance - PennTex Midstream Partners

Energy and Energy Security: Turkey`s Role