CALGARY -- TransCanada Corp. says it's moving ahead with a $655-million expansion of its Nova Gas Transmission Ltd. system in northwestern Alberta.

The company (TSX:TRP) says the Saddle West Expansion Project will add 29 kilometres of pipeline capacity to existing routes, as well as five compressor units, that together will increase the capacity of the system by about 355 million cubic feet per day.

TransCanada said it expects to apply to the National Energy Board for approval in the third quarter next year, with construction expected to start in 2018 and the project in service the year after.

The project will add transportation capacity to the growing shale gas developments in the Montney, Duvernay and Deep Basin formations, with TransCanada saying the pipeline expansion is already supported by incremental firm service contracts.

The federal government conditionally approved a separate $1.3-billion expansion of the Nova Gas Transmission system in October, which will add 230 kilometres of pipeline and two compressor stations.