KN Targeting IL, WI With New Project
Undeterred by those who have gone before it and failed, KN
Energy jumped into the fray with a pipeline project to serve
northern Illinois and southern Wisconsin.
The Horizon Pipeline would be a 129-mile, high-pressure line
from Joliet, IL, to Hales Corners, WI. The 36-inch pipeline would
transport between 630 MMcf/d and 1.2 Bcf/d upon completion, which
is proposed for fall 2001. Construction is to begin in spring 2001,
and the estimated cost is $150 million to $250 million, depending
on shipper response and design capacity.
Horizon Pipeline would begin at the emerging gas supply hub near
Joliet, where the interconnection of several pipelines offers
access to gas supply and a variety of storage and hub services. The
pipeline would connect with Natural Gas Pipeline Company of America
(NGPL), a subsidiary of KN Energy, and with Nicor Gas and the
Alliance Pipeline. Potential connections to other pipelines are
being reviewed. NGPL would operate Horizon, and KN plans to jointly
own the pipeline with one or more other partners.
"We're proposing Horizon Pipeline to accommodate the continued
growth and increasing need for additional gas supply in northern
Illinois and southern Wisconsin," said Rick Wells, KN executive
vice president. "This project brings additional natural gas, supply
diversity and competitive storage services into a fast-growing
region of the Midwest. The proposed pipeline will make use of a
great deal of existing infrastructure of pipe systems, equipment
and rights-of-way which will help keep costs down and minimize
Scott Parker, KN director of business development, said the
company already has a strong relationship with customers who could
use the new pipe as it serves southern Wisconsin through NGPL
already. He said KN is talking to Wisconsin LDCs and is eyeing the
potential for power generation load in the region. He would not
speculate on what percentage of Horizon throughput could end up
serving power generators. As Horizon is a stand-alone pipeline, it
will have its own tariff with rates yet to be determined, Parker
said. "We're going to be extremely competitive.."
By using existing facilities and rights-of-way and minimizing
new pipe, Horizon would be able to deliver gas to Wisconsin
Electric Power Co.'s system in Milwaukee and Racine counties, WI,
and NGPL's and Nicor Gas' systems in McHenry County, IL. In
addition, there is potential to connect to North Shore Gas Co.'s
system in Cook and Lake counties, IL. Based on potential shipper
demand, Wisconsin Gas' distribution system can be connected with
the addition of a short lateral.
Wisconsin Gas, however, already has signed up for 650 MMcf/d of
firm capacity on the competing Guardian Pipeline, another new
interstate line planned to serve northern Illinois and southern
Wisconsin. Guardian is holding an open season through June 3. The
pipeline would have a minimum capacity of 650 MMcf/d and would be
expandable, depending on the market, to up to 1.1 Bcf/d. The
project's planned in-service date is Nov. 1, 2002. Guardian would
transport gas from interconnections with Alliance, Northern Border,
NICOR, Midwestern, NGPL and the proposed Tristate Pipeline near
Joliet, IL, to the Watertown, WI, area. The project is jointly
owned by WICOR, CMS Energy Corp. and Viking Gas Transmission, with
each holding a one-third interest.
Others have tried targeting the Wisconsin market and failed. The
Illinois-Wisconsin Express Project - backed by Peoples Energy,
Northern Border, El Paso Energy, and Enron - has been put on
indefinite hold. And TransCanada PipeLines and Nicor Inc. late last
year scrapped plans for their reconfigured Voyageur Pipeline (see Daily GPI Nov. 5, 1998). Peoples Energy and
Northern Border have given signals they might go ahead with a
Wisconsin project on their own.
Meanwhile, Coastal's ANR in March applied to the Federal Energy
Regulatory Commission for another expansion of its Wisconsin system to
add nearly 200 MMcf/d of capacity for in-service November 2000 (see Daily GPI March 9, 1999).
A Horizon open season will begin this month. Shippers seeking
additional information on the project can contact Scott Parker, KN
director of business development, at (630) 691-3689.