TRANSCANADA EXPANSION DRAWS OPPOSITION

An application by TransCanada PipeLines Ltd., Calgary, for a $2.6 billion expansion program to serve U.S. export markets faces a second legal challenge. The action has been filed in the Federal Court of Canada by the Industrial Gas Users Association, which earlier won a ruling requiring the National Energy Board to examine how it sets pipeline tolls. The TransCanada project would tie Canadian gas into the proposed Iroquois system to serve markets in the U.S. Northeast (OGJ, May 21, p. 28).

June 11, 1990

2 min read

An application by TransCanada PipeLines Ltd., Calgary, for a $2.6 billion expansion program to serve U.S. export markets faces a second legal challenge.

The action has been filed in the Federal Court of Canada by the Industrial Gas Users Association, which earlier won a ruling requiring the National Energy Board to examine how it sets pipeline tolls. The TransCanada project would tie Canadian gas into the proposed Iroquois system to serve markets in the U.S. Northeast (OGJ, May 21, p. 28).

NEB agreed last month to provide a verbal ruling on the toll issue to help speed the hearing process. The gas users' second suit challenges that decision because, they say, it would prevent the association from widening the inquiry on tolls to include previously approved expansions of the pipeline system which ships gas from western Canada to eastern markets.

The new appeal could affect about $2 billion in expansions by TransCanada and related facilities during the past 3 years. No date has been set by the court to hear the matter,

TransCanada wants NEB to retain its present rolled-in toll system in which all users share expansion costs. The gas users, on the other hand, seek an incremental system in which costs would be paid by companies benefiting from added sales as a result of the expansion.

Meanwhile, Nova Corp., Calgary, will cut its planned 1991 spending, citing delays in approval of the TransCanada project. The company's expansion budget of $671 million will be trimmed to $536 million.

Nova, which operates the main Alberta gas pipeline system, had planned to boost its capacity to 5.77 bcfd from 5.1 bcfd by Nov. 1, 1991, at Empress, Alta., where the system connects with the TransCanada line. Instead, it will hold Empress capacity at the current level.

Nova said the expansion is delayed, not canceled.