Alliance pipeline to start up Friday

The 2,300-mile Alliance natural gas and liquids pipeline system from Western Canada to the Chicago market ceremonially celebrated its startup after three earlier start-up delays due to weather and commissioning problems. The pipeline will begin commercial shipments Friday.

The line was originally scheduled to begin operation Oct. 1.

The $4.5 billion (Can.) line has an initial capacity of 1.325 bcf/day and volumes can be increased to 2.1 bcfd. Liquids will be extracted and processed at a the Aux Sables plant near Chicago.

The line, initially backed by a group of 24 Alberta producers, provides an alternative delivery system to the TransCanada PipeLines Ltd. system for export gas and eliminates a long-standing capacity bottleneck.

Planning for the line began in late 1994 when producers sought an alternative system. The construction and regulatory process took more than four years, including a two-year construction phase.

The system includes 14 mainline compressor stations, 37 receipt points in British Columbia and Alberta, and seven delivery points in Illinois. Interests in the Alliance Pipeline are Coastal Corp., 14.4%; Enbridge Inc., 21.4%; Fort Chicago Energy Partners, 26%; the Williams Cos., 14.6%; and Westcoast Energy Inc., 23.6%.

The line is starting at a time when Western Canada producers are enjoying record prices for gas of about $7.90 (Can.)/GJ and prices are expected to remain strong this winter heating season.

Meanwhile, TransCanada announced Thursday it is cutting some 200 employees from its 3,000-strong payroll.

Company spokesman Kurt Kadatz said final numbers on staff reductions are hard to determine because staffing needs are being determined at the local level across the company.

TransCanada, which has surplus capacity in its line, has been involved over the past year in a sale of non-core assets, including foreign pipeline interests, that has raised about $3.4 billion so far (OGJ Online, Oct. 12, 2000).

The company cut about 900 jobs since a difficult $14 billion merger with Nova Corp., Calgary, which operated the main gas pipeline system in Alberta.

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