(Reuters) - Pipeline company TransCanada Corp said it had reached a distribution agreement with gas companies in Ontario and Quebec, that ends disputes over tolls and allows for increased supplies.
TransCanada said it was still in talks with Union Gas Ltd, Gaz Metro Ltd Partnership and Enbridge Gas Distribution Inc over plans to convert a portion of its mainline gas pipeline to carry oil to the Atlantic coast from Western Canada.
The conversion has been opposed by gas distributors in eastern Canada, who fear a loss of gas pipeline capacity that would result in higher gas prices.
TransCanada Chief Executive Russ Girling said in a statement on Friday that the company would ensure sufficient capacity to meet the needs of its gas customers.
The agreement will provide for a new natural gas transportation path through the planned Parkway pipeline to the Maple corridor near Toronto.
Union Gas is a unit of Spectra Energy Corp and Enbridge Gas Distribution is a unit of Enbridge Inc .
(Reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty)