ALTAMONT GAS PIPELINE PROJECT DELAYED 1 YEAR

Altamont Gas Transmission Co. will delay laying a 30 in., 620 mile pipeline to deliver Canadian gas to California until markets become more responsive. The decision will delay until November 1994 completion of the proposed 719 MMcfd, $612 million line. The original schedule called for construction to begin in spring 1993 with an in-service date of late 1993.

Aug. 3, 1992

3 min read

Altamont Gas Transmission Co. will delay laying a 30 in., 620 mile pipeline to deliver Canadian gas to California until markets become more responsive.

The decision will delay until November 1994 completion of the proposed 719 MMcfd, $612 million line. The original schedule called for construction to begin in spring 1993 with an in-service date of late 1993.

Altamont pipeline is to transport gas from the U.S-Canadian border at Port of Wild Horse, Mont., to Opal, Wyo., where it will interconnect with the Kern River Transmission Co. pipeline to California. Altamont has obtained all regulatory approvals for its project. Altamont said project sponsors Tenneco Gas, Amoco Corp., and Entech Inc. support the decision to delay the start of construction.

CONCERNS CITED

Altamont Pres. Ewell Muse III said concerns of Alberta's Energy Resources Conservation Board (ERCB) commissioners as well as sentiments expressed by Alberta gas producers and the general public figured heavily in the decision to wait.

"We have always vowed to be responsible and responsive to our customers," Muse said. "Since most of our customers are based in Alberta, we are particularly concerned about our effect on the province."

Among factors contributing to the decision, Muse cited:

Continuing discussions with Altamont customers that indicate continuing softness in California gas markets.
An ERCB report released in June - based on information about gas export projects serving California - that questioned whether the state's gas markets would need additional supplies of Canadian gas in 1993.
An Altamont survey showing Alberta gas producers, marketers, suppliers, and executives of companies controlling more than 70% of the province's production favor delaying gas export projects into California.
A poll of the general public in Alberta in which a surprising number of respondents favored delaying gas export projects, if necessary, to benefit the province. Muse noted Alberta receives significant royalties from gas production in the province.

COMPETITION STATUS

Altamont is competing with Pacific Gas Transmission Co., of California, which has begun a $1.6 billion U.S. expansion of its Alberta-California pipeline.

PGT has spent more than $700 million on its project, which is scheduled for completion in November 1993.

ERCB said completion of both projects would create surplus shipping capacity to California for a number of years.

"The public has no problem understanding that the timing of these projects directly affects them," Muse said. "Even more surprising, a majority favored government assuming a role in timing the expansions."