TransCanada Scales Back Expansion Plans
TransCanada PipeLines said last week the loss of two shipper
agreements enabled it to slash the price of its 1999 expansion
project by more than half, but it still anticipates being able to
provide 76% of the capacity (208 MMcf/d) of the original project by
November 1999. The Canadian pipeline monopoly filed its original
project application with the National Energy Board in April.
The new project will cost only C$404.5 million, down by C$575.9
million from the April plan, and will add 108 MMcf/d of new
capacity by November 1999 through construction of 97 miles of new
pipeline looping and four additional compressor units. The project
will serve customers in eastern Canada, and the U.S. Midwest and
Northeast. The remaining 100 MMcf/d will be provided through
transportation service already available in the marketplace,
including capacity turned back by others, TransCanada said.
TransCanada said Kamine Development offered to relinquish 44
MMcf/d of its capacity on the system following the Niagara Mohawk
Power Corp. settlement, which resulted in the termination of
long-term power sales agreements with NiMo and the shutdown of
three Kamine cogeneration facilities. In addition, Union Gas
decided not to take its 38 MMcf/d portion of the proposed new
capacity when it found enough excess in the secondary market to
meet a portion of its incremental transportation needs. "We intend
to continue to survey the needs of our customers to be market
responsive and ensure that any facilities we build are necessary
and in the public interest," said TransCanada Energy Transmission
President Bob Reid.
"We continue to seek ways to keep down costs and take innovative
approaches to meet the needs of our customers. This approach is in
keeping with our objective to be the low-cost transporter of
natural gas to multiple markets in North America."
The changes filed with the NEB lowered capital costs by 59%.
Should this application be approved and the facilities constructed
by November 1999, TransCanada will have expanded its delivery
capability by about 1.1 Bcf/d since November 1996. Combined with
the 700 MMcf/d expansion into Chicago by Northern Border pipeline,
30% owned by TransCanada, these expansions will have increased
delivery capability from the Western Canadian Sedimentary Basin
(WCSB) by 1.8 Bcf/d between 1996 and 1999.
"The outlook for continued low-cost expansion on our pipeline
system remains positive, particularly in light of the recent accord
with western Canadian producers that supports the regulatory
changes necessary to encourage continued pipeline expansion from
western Canada," said Reid.
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