Canada's Alliance Pipeline group has hit regulatory delays that may cause it to lose the race to build a major Canada-to-U.S. natural gas export line (OGJ, Aug. 25, 1997, p. 29).
Alliance says its planned gas pipeline from British Columbia to the Chicago area may be delayed as much as 1 year because of a slowdown in the Canadian regulatory process.
Alliance official Jack Crawford said the delay was disappointing but not a major setback. Crawford said the lengthy National Energy Board hearing now under way on the project has caused delays that will make Alliance miss the summer pipeline construction season.
Procedural issues delayed start of the NEB hearing from November to late January. The hearing is expected to end in May, with a ruling on the project coming within 3-6 months.
Companies that signed $1.2 billion in construction contracts with Alliance-originally slated for start of construction in July-now can bid on other, competing projects.
Alliance said the U.S. regulatory process is still on track for approval at about midyear.
The Alliance line was originally planned for completion in November 1999; it is now expected in second half 2000.
The $3.7 billion (Canadian) pipeline would move 1.3 bcfd of natural gas and some liquids into the Chicago market. It has been opposed by a number of potential competitors, including NOVA Corp. and TransCanada PipeLines Ltd., both of Calgary.
Meanwhile, Alliance has confirmed it is holding talks with NOVA and TransCanada, which recently announced plans to merge (OGJ, Feb. 2, 1998, p. 30).
The Canadian Association of Petroleum Producers (CAPP) estimates the delay in Alliance completion could cost Western Canada producers $1-2 billion/year in revenues because of lower-than-expected export capacity.
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