TransCanada secures long-term commitments for Keystone Oil Pipeline project

CALGARY, Alberta – January 31, 2006 – TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) today announced the Keystone Oil Pipeline project has secured firm, long-term contracts totalling 340,000 barrels per day with duration averaging 18 years. The commitments were obtained through the successful completion of a binding Open Season held during the fourth quarter of 2005. With these commitments from shippers, TransCanada will proceed with regulatory filings for approval of the estimated US$2.1 billion pipeline project that will transport crude oil from Alberta to U.S. mid-west refineries.

“The positive commercial response we received confirms that shippers recognize the value of our project as a cost-competitive way to link growing oil sands supply to U.S. energy markets,” said TransCanada chief executive officer, Hal Kvisle. “With crude oil production from the oil sands expected to grow by approximately 1.5 million barrels per day over the next 10 years, TransCanada’s Keystone project will help meet a critical need for additional pipeline infrastructure.”

Public and stakeholder consultation and detailed engineering work will continue throughout 2006. Before construction can begin, Keystone will require regulatory approvals from a variety of Canadian and U.S. agencies. Specifically, TransCanada will file applications with the National Energy Board in 2006 for project approvals. Construction is proposed to begin in late 2007, with commercial operations scheduled to commence by the fourth quarter of 2009.

As outlined in the memorandum of understanding (MOU) signed between TransCanada and ConocoPhillips Pipe Line Company (CPPL) on Nov. 3, 2005, CPPL has the right, upon certain conditions, to acquire up to a 50 per cent participating interest in the project. ConocoPhillips Company, CPPL’s parent, has committed to ship crude oil on the pipeline system.

Once constructed, the Keystone Oil Pipeline will be capable of transporting approximately 435,000 barrels per day of crude oil from Hardisty, Alberta, to Patoka, Illinois, through a 1,830-mile (2,960-kilometre) pipeline system. The pipeline can be expanded to 590,000 barrels per day with additional pump stations. In addition to approximately 1,070 miles (1,730 kilometres) of new pipeline construction in the United States, the Canadian portion of the proposed project includes the construction of approximately 230 miles (370 kilometres) of new pipeline and the conversion of approximately 530 miles (860 kilometres) of existing TransCanada pipeline facilities from natural gas to crude oil transmission.

Shippers have also expressed interest in proposed extensions of the Keystone pipeline system to Cushing, Oklahoma and Fort Saskatchewan, Alberta. TransCanada expects to hold a binding Open Season for these two extensions later this year.

TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure. TransCanada’s network of approximately 25,600 miles (41,000 kilometres) of pipeline transports the majority of Western Canada’s natural gas production to key Canadian and U.S. markets. A growing independent power producer, TransCanada owns, or has interests in, approximately 6,700 megawatts of power generation in Canada and the United States. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP.

FORWARD LOOKING INFORMATION

Certain information in this news release is forwa rd-looking and is subject to important risks and uncertainties. The results or events predicted in this information may differ from actual results or events. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, regulatory decisions, competitive factors in the pipeline and power industry sectors, and the current economic conditions in North America. For additional information on these and other factors, see the reports filed by TransCanada with Canadian securities regulators and with the United States Securities and Exchange Commission. TransCanada disclaims any intention or obligation to update or revise any forwa rd-looking statements, whether as a result of new information, future events or otherwise.

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