TransCanada files application to construct Keystone Oil Pipeline

CALGARY, Alberta – December 13, 2006 – TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) today announced that an application has been filed with the National Energy Board (NEB) for approvals to construct and operate the Canadian portion of the Keystone Pipeline. TransCanada anticipates the Pipeline, which will transport crude oil from Hardisty, Alberta to refining centres in the U.S. Midwest, will be placed in service in late 2009.

“Crude oil pipeline capacity out of the Western Canada Sedimentary Basin is already tight and as production volumes increase, that capacity will become increasingly constrained,” said Hal Kvisle, TransCanada’s chief executive officer. “The Keystone Pipeline is the critical infrastructure shippers need to access key markets. We have secured firm, long-term commitments from shippers to transport 340,000 barrels of crude oil per day for an average term of 18 years.”

The Keystone Pipeline is a proposal to build a 2,965-kilometre (1,842-mile) pipeline that will have a nominal capacity to transport approximately 435,000 barrels per day of crude oil from Hardisty, Alberta, to U.S. Midwest markets at Wood River and Patoka, Illinois. The pipeline can be expanded to a nominal capacity of 591,000 barrels per day with additional pump stations.

This application, filed by TransCanada’s wholly owned subsidiary TransCanada Keystone Pipeline GP Ltd. (Keystone), is the second of two major regulatory applications to the NEB for the Canadian leg of the Keystone Pipeline. In the application, Keystone seeks approval to construct and operate new facilities in Canada including approximately 371 kilometres of new oil pipeline, terminal facilities at Hardisty, Alberta, and pump stations. Keystone is also seeking approval of tolls and the tariff for the pipeline. The estimated capital cost of the Canadian portion of the project is approximately CDN$664 million.

In June 2006, TransCanada and Keystone filed an application with the NEB seeking approval to transfer a portion of its Canadian Mainline natural gas transmission facilities to Keystone for use as part of the Keystone Pipeline. Public hearings on the transfer application were completed in mid-November and TransCanada anticipates a decision on its transfer application from the NEB in early 2007.

The Keystone Pipeline will also require approvals from a variety of U.S. agencies at the state and local levels. The U.S. portion of the project includes approximately 1,730 kilometres (1,075 miles) of new pipeline construction.

Public and stakeholder consultation, detailed environmental assessments and field studies, and further engineering work are ongoing in both Canada and the U.S. and will continue into 2007. Construction is expected to begin in early 2008, with commercial operations scheduled to commence in the fourth quarter of 2009.

TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure. TransCanada’s network of more than 42,000 kilometres (26,000 miles) 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 7,700 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 forward-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 forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.

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