CALGARY - TransCanada Corporation (TSX:TRP) has been given the final go-ahead by the Quebec government to build a $500 million natural gas-fired cogeneration power plant in Becancour, near Trois-Rivières, the company announced Monday.

The 550-megawatt plant will be located in Becancour's industrial park and will supply its entire power output to Hydro-Quebec Distribution under a 20-year agreement. It will also supply steam to two companies within the park, Norsk Hydro and Pioneer Chemicals Inc.

  "We are pleased the government of Quebec has authorized the project," TransCanada's chief executive officer Hal Kvisle said. "We are confident we will meet our in-service date of September 2006 and look forward to providing Quebec with this much needed additional energy supply."

The project had received approval from Quebec's Régie de l'énergie in August 2003 and cleared an environmental review in April this year.

TransCanada said SNC-Lavalin Services Ltd. has been awarded the contract to design, construct and commission the power plant. It said construction activities, creating up to 500 jobs, will begin within weeks.

Shares of TransCanada closed down 55 cents at $25.47 on the TSX.

Written by CBC News Online staff