Alliance boosted by rival project's woes

Prospects for the proposed Alliance natural gas pipeline from Western Canada to Chicago have been bolstered by lack of shipper support for a rival project. Viking Gas Transmission Co. said it does not have enough support from potential shippers to make viable the $1.24 billion (U.S.) Viking Voyageur line to move an initial 1.4 bcfd of gas from Emerson, Man., to the Chicago area.

May 11, 1998

2 min read

Prospects for the proposed Alliance natural gas pipeline from Western Canada to Chicago have been bolstered by lack of shipper support for a rival project.

Viking Gas Transmission Co. said it does not have enough support from potential shippers to make viable the $1.24 billion (U.S.) Viking Voyageur line to move an initial 1.4 bcfd of gas from Emerson, Man., to the Chicago area.

TransCanada PipeLines Ltd., Calgary, a major partner in Viking Voyageur, said lining up gas commitments is a critical issue for the project. TransCanada and U.S. partner, Nicor Inc., Naperville, Ill., say they remain committed to serving markets in the upper U.S. Midwest and are pursuing options to provide gas transportation to the area.

Nicor said that Viking Voyageur has received extensive support from energy companies in Wisconsin and is proceeding well in the regulatory process.

Alliance confidence

Alliance spokesman Jack Crawford said the consortium is confident that it will receive approval from the National Energy Board, which is close to completing hearings on its project.

Crawford noted that TransCanada and Nova Corp., Calgary, the main opponents of Alliance at the hearings, have resubmitted their evidence and reduced it significantly.

He said that this should reinforce prospects for an NEB decision that the $3.7 billion (Canadian) Alliance project is in the public interest.

It would move 1.3 bcfd of natural gas and liquids from Northeast British Columbia to Chicago and is designed for expansion to 2 bcfd.

Northern Border expansion

In other Canadian gas pipeline action, progress on the 700-MMcfd expansion of the Northern Border gas system between Alberta and the U.S. Midwest is on schedule for Nov. 1, 1998, service. Five pipeline spreads are at work or will be by the end of May. Crossings of the Mississippi and Des Plaines rivers are in their final stages.

When combined with capacity expected from the Alliance Pipeline in mid-2000, 2 bcfd of additional transportation capacity will have been added to bring gas from Western Canada to the Chicago hub.

Industry observers agree that the effect will be to raise prices for Albertan producers, lower prices at the Chicago hub, and push as much as 2.7 bcfd of additional capacity eastward to a U.S. Northeast market that will be served early in the next decade by new gas supplies from the Sable Island area off Nova Scotia.