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Vector Plans to Add 500 MMcf/d Between Chicago and Dawn

Vector Pipeline announced plans to add 500 MMcf/d of firm transportation capacity to its system, bringing total capacity to 1.5 Bcf/d. The company is holding a binding open season to test market interest in the 2007 expansion project, which will involve the construction of up to three additional compressor stations.

"The results of our nonbinding open season in fall 2004 were encouraging," said Vector President Craig R. Fishbeck. "Recent favorable changes in market conditions -- including increasing demand downstream of Dawn, the ongoing conversion of coal-fired power plants to natural gas in Ontario and continued East Coast interest in natural gas sourced from the Midwest -- clearly support the need for the diversified supply that this expansion will offer."

Fishbeck said the project will provide an economic, direct route for gas delivery from the Chicago Hub to storage and markets in the Midwest, southwest Ontario and the East Coast through interconnecting pipelines.

Matt Malinowski, Vector's manager of market development, said the pipeline has been running at greater than a 90% load factor for more than a year now and the price spread between Chicago and Dawn has widened substantially since the 349-mile pipeline from the Chicago Hub in Joliet, IL, to the Dawn Hub in Ontario first went into service in 2000.

He noted the price spread has been holding at highs of more than 30 cents recently compared to less than 20 cents when Vector first started service five years ago. The spread averaged 34 cents several days last week.

Excess Canadian and domestic gas supply has driven down Chicago Hub prices, while increasing demand in Ontario and the Northeast has helped raise prices at Dawn. Ontario is phasing out coal-fired power generation in favor of more natural gas-fired power, nuclear, renewables and conservation. Meanwhile, Union Gas is planning a two-phase expansion east of the Dawn Hub. And the Millennium Pipeline is expected to refile an application sometime this year for Phase I of its new system.

Malinowski said Vector expects to need three new compressors, totaling about 90,000 hp, but no new pipeline looping. Binding bids for additional firm capacity will be accepted through June 1.

Vector has pipeline interconnections with Alliance, Northern Border, Guardian, ANR, NIPSCO, Crossroads, Consumers Energy, MichCon, DTE Washington 10 Storage, Bluewater Gas Storage and Union Gas. Two power plants also are tied into the Vector system: Crete Energy Ventures and Kinder Morgan-Jackson.

For details on the open season contact John Donaldson at (734) 462-0238 or Matt Malinowski at (734) 462-0236 or go to http://www.vector-pipeline.com.

Vector is a joint venture between Calgary-based Enbridge Inc. (60%) and Detroit-based DTE Energy (40%).

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