Pipeline Profiles: Trans Quebéc & Maritimes

Pipeline system and key points

Updated January 2018

Trans Qu & Maritimes Pipeline Map

The Trans Québec & Maritimes pipeline (TQM) transports natural gas in the province of Québec. The pipeline commenced operations in 1982. At the end of 2016, regulated assets include 572 km of pipeline and various auxiliary infrastructures. Gaz Métro Holding Inc., a wholly-owned subsidiary of Gaz Métro Limited Partnership and TransCanada PipeLines Limited are the general partners of TQM.

TQM extends from an interconnect with the TransCanada Mainline near Saint Lazare, Québec, to a point near Québec City in the municipality of Lévis on the south shore of the St. Lawrence River. TQM also extends from Terrebonne, north of Montreal, to a point on the Canada-U.S. border near East Hereford, Québec. The TQM pipeline has 31 delivery points and two compressor stations.

Key points on TQM include:

  • East Hereford – export interconnect with the Portland Natural Gas Transmission System at the Canada-U.S. border near East Hereford, Québec. TQM delivers natural gas customers in the U.S. states of Vermont, New Hampshire, Maine and Massachusetts.
  • Saint Lazare – interconnect with the TransCanada Mainline near Saint Lazare, Québec.  The TransCanada Mainline delivers natural gas produced in the Western Canadian Sedimentary Basin and the Appalachian Basin.

Board documents related to the construction, operation and maintenance of the TQM pipeline can be found here: TQM pipeline regulatory documents [Folder 90703].

Throughput and capacityFootnote 1

Updated quarterly

 

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Abandonment funding

Updated May 2018

The Board requires all pipelines to set aside funds to safely cease operation of a pipeline at the end of its useful life. In 2016, TQM estimated it would cost $116 million to do this. These funds will be collected over 25 years and are being set aside in a trust. Official Board documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Tolls

Updated January 2018

A toll is the price charged by a pipeline company for transportation and other services. Tolls allow pipeline companies to safely operate and maintain pipelines. Tolls also provide funds for companies to recover capital (the money used to build the pipeline), pay debts, and provide a return to investors. The interactive graph below shows the TQM T-1 firm transportation toll for the system per month since 2006. Tolls increased in 2017 under the toll settlement from $6.6 million per month in 2016 to $7.3 million in 2017.

 

TQM tolls are calculated in accordance with a toll settlement for 2017 to 2021 and are cost-based. The Board approved TQM’s tolling methodology in February 2017 (Order TG-001-2017) [Folder 3179270]. The TransCanada Mainline has a firm contract for all the capacity on TQM and demand charges are paid by TransCanada PipeLines, regardless of flows.

Official Board documents related to the traffic, tolls and tariffs for TQM can be found here: TQM toll documents. [Folder 92841]

Pipeline financial information

Updated March 2018

Pipeline companies report important financial information to the Board quarterly or annually. A solid financial position enables companies to maintain their pipeline systems, attract capital to build new infrastructure, and meet the market’s evolving needs. The data in this table comes from TQM’s Quarterly Surveillance Reports [Folder 155540].

TQM’s 2017-2021 Settlement Agreement and previous settlement agreements since 2010 set a fixed return on rate base and did not specify a capital structure or rate of return on equity. For illustrative purposes, TQM reports its rate of return on rate base based on the After Tax Weighted Average Cost of Capital (ATWACC) methodology as approved by the NEB’s most recent cost of capital decision for TQM, RH-1-2008 [Document 551438]. Because the ATWACC includes after-tax return on debt as well as return on equity on the full rate base, it is typically lower than return on equity reported on only the equity component of rate base. In recent years it has averaged about 6%. TQM’s revenue has been stable, and its costs and rate base have been declining.

Table 1: TQM financial data

TQM financial data

2010

2011

2012

2013

2014

2015

2016

2017

Revenues (millions) $82 $82 $82 $79 $81 $84 $81 $85
Fixed costs (millions) $70 $69 $69 $64 $60 $59 $56 $57
Average Rate base (millions) $413 $394 $373 $362 $353 $343 $340 $334
Return on equity 6.4% 6.47% 6.76% 5.66% 6.12% 5.91% 6.40% 5.32%

Corporate financial information

Updated January 2018

TQM is owned by Trans Québec & Maritimes Pipeline Inc. which is owned 50% by TransCanada PipeLines Limited and 50% by Gaz Métro Holding Inc., a wholly-owned subsidiary of Gas Métro Limited Partnership, the natural gas distribution company in Québec. Its credit rating is highly influenced by Trans Canada PipeLines’ credit rating, as nearly all of TQM’s earnings are from a long-term contract with TransCanada PipeLines Limited. All financial ratios have remained stable and TQM’s credit ratings remain investment grade.

Credit ratings and financial ratios provide an idea of the financial strength of a company, including its ability to attract capital to build new infrastructure and meet financial obligations. The credit ratings below are expert opinions of how likely the debt issuer is to live up to its obligations. The financial ratios provided below were calculated by DBRS.

Table 2: Trans Quebec & Maritimes Pipeline Inc. financial ratios and credit ratings

Trans Quebec & Maritimes Pipeline Inc. financial ratios and credit ratings

2013

2014

2015

2016

2017

Interest and fixed-charges coverage ratio 3.75 3.98 4.29 4.51 n/a
Cash flow-to-total debt and equivalents ratio 16.7% 17.7% 18.0% 18.7% n/a
DBRS credit rating A (low) A (low) A (low) A (low) A (low)
S&P credit rating n/a A- A- A- A-

Financial regulatory audits

Updated March 2018

The Board audits pipeline companies to confirm compliance with the National Energy Board Act, regulations, Board orders and Board decisions. Financial regulatory audits focus on toll and tariff matters such as detecting cross-subsidies. TQM’s last audit was completed in April 2011. Official Board documents related to TQM’s financial regulatory audits can be found here [Folder 646387].

Date modified: