Action continues on pipeline projects proposed to serve growing gas demand in California and the U.S. Northeast.
Among the latest developments:
- Pacific Gas Transmission Co. and Pacific Gas & Electric Co. let contract to Bechtel Corp. to manage construction of the $1.2 billion expansion of their system from Canada to California.
- Montana Power Co. joined the competing Altamont pipeline project planned to link Alberta with Kern River Transmission Co.'s project, a proposed Wyoming-California gas pipeline. PGT-PG&E and Altamont-Kern River are among a group of proposed pipeline projects vying to serve surging gas demand in California (OGJ, Sept. 4, 1989, p. 21).
- A Coastal Corp. unit offered support to the proposed Iroquois Gas Transmission system to serve the U.S. Northeast with Canadian gas with an alternative route that might ease regulatory concerns.
- Rochester Gas & Electric Corp. (RG&E), an upstate New York utility, signed a letter of intent to acquire a 20% equity interest in the Empire State Pipeline project in New York.
PGT-PG&E PROJECT
Bechtel will conduct detailed engineering, design, and right-of-way work on the PGT-PG&E project. Value of the contract to Bechtel is not disclosed.
Plans call for construction to start by yearend 1991, with first deliveries scheduled in 1993.
More than 20 shippers, representing western U.S. utilities, end users, and Canadian gas producers, have signed contracts to transport a total of 755 MMcfd of gas to California and 148 MMcfd to the Pacific Northwest on the expansion.
The project calls for laying about 900 miles of 42 in. and 36 in. loop on PGT-PG&E systems from British Columbia to California.
Bechtel's contract covers two phases. The first phase involves planning and design prior to certification of the project by the Federal Energy Regulatory Commission. The second phase will be construction. Bechtel participated in construction of PG&E's original Alberta-California pipeline in the 1960s and its expansion as part of the Alaska Natural Gas Transportation System in the early 1980s.
ALTAMONT PROJECT
Montana Power will take a 10% interest in the Altamont pipeline project based in Calgary.
Correspondingly, Tenneco Inc. will decrease its interest in Altamont to 40% from 50%.
Financial terms of the arrangement are not disclosed.
Remaining partners in the group-Amoco Canada Ltd., Shell Canada Ltd., and Petro-Canada-have a 16 2/3% interest apiece.
The $580 million, 700 MMcfd U.S. line from Alberta would connect with the Kern line near Opal, Wyo.
Altamont Project Manager Jerry van der Linden said some Montana gas could be picked up on the Alberta-Wyoming line.
IROQUOIS PROJECT
Coastal's ANR Pipeline Co. is ready to join TransCanada PipeLines Ltd. in the Iroquois project, said ANR Executive Vice Pres. James Cordes.
Cordes said ANR will help choose an alternate route if a planned expansion of the TransCanada system to supply Iroquois is affected by National Energy Board rulings on setting tolls to pay for new facilities.
The alternate route would entail shipping much of the gas via a U.S. loop owned by ANR and TransCanada in a 50-50 partnership with Great Lakes Transmission Co.
ANR is willing to expand the line to serve Iroquois needs, Cordes said.
The Federal Court of Canada recently ordered NEB to consider how it sets tolls at an upcoming hearing (OGJ, Feb. 26, p. 44).
Opponents say that the present rolled-in toll system, in which the cost of new facilities is shared by all users, is unfair.
They contend companies that benefit most from added exports should pay for expanded facilities.
The $1.2 billion Iroquois project will run 370 miles from the Canadian border through New York and Connecticut to Long Island, N.Y., and calls for expansion of TransCanada's line to the New York border.
Alberta producers last summer approved a contract supporting the Iroquois project and rejected contracts supporting the competing Champlain project (OGJ, Aug. 14, 1989, p. 28).
The U.S. Department of Energy recently authorized a big hike in the volume of Canadian gas exports to the U.S. Northeast, enough to cover about 75% of Iroquois transport volumes (OGJ, Jan. 22, p. 21).
NEW YORK PROJECT
RG&E will join a Coastal unit and Union Enterprises, a unit of Unicorp Canada Corp., Toronto, in participation in the Empire State project, an $82.5 million, 155 mile intrastate pipeline between Niagara Falls and Syracuse.
Designed for average throughput of 150 MMcfd, the line will provide end users in western and central New York state transportation services and access to every major North American supply basin via interstate links.
The group filed a request to construct and operate the line with the New York Public Service Commission in June 1988.
A decision on that application is expected soon.
RG&E, already committed as a significant Empire customer, has entered into upstream transportation and storage arrangements required to begin service from the project.
RG&E supplies electricity and gas service in New York state and is involved in production, transmission, distribution, and sale of electric power and gas in a nine county area centering on Rochester.
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