TransCanada (NYSE:TRP) announced today that it has been selected by Progress Energy Canada to design, build, own, and operate a natural gas pipeline stretching from inland North Montey in British Columbia to a proposed coastal LNG export facility.

The route stretches approximately 750 kilometers (470 miles) and is expected to cost $5 billion, plus an additional $1 billion to $1.5 billion to connect the new pipeline to a larger existing network. Initial pipeline capacity of the proposed Prince Rupert Gas Transmission project will be 2 billion cubic feet of gas per day, with the ability to expand to 3.6 billion cubic feet of gas per day.

Progress Energy Canada was bought last month by Malaysian company PETRONAS, although it will continue to operate as a separate entity.

In a statement released today, TransCanada President and CEO Russ Girling said: "Together with our previously announced Coastal GasLink Pipeline project, this is the second major natural gas pipeline proposed to Canada's West Coast for TransCanada - demonstrating the confidence that LNG sponsors continue to place in our ability to design, build and safely operate pipeline systems."

This newest projects comes as part of a larger plan to improve Canada's natural gas export capabilities to Asian countries such as Japan and China. Progress and Transcanada hope to seal the deal in early 2013, pending board approvals and consultation with aboriginals and other stakeholders.

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Justin Loiseau has no position in any stocks mentioned. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.

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