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Millennium Gains Ground; Upstream Links Filed

Millennium Gains Ground; Upstream Links Filed

TransCanada Pipelines and Westcoast Energy subsidiary St. Clair Pipelines last week filed with Canada's National Energy Board to build the last remaining support components required for development of the Millennium Pipeline project, a 700 MMcf/d gas line designed to serve markets throughout the Northeast.

St. Clair's 50-mile Millennium West Pipeline would pick up 700 MMcf/d of gas at Union Gas' Dawn Hub in Ontario and deliver it to Patrick Point on the Northwest shore of Lake Erie at a new connection with TransCanada. The St. Clair portion would cost $165 million.

The TransCanada portion, called the Lake Erie Crossing, is a 61-mile, 36-inch diameter line to the middle of the lake at the U.S. Canadian border and a connection with Millennium. It would cost $161.8 million to build.

TransCanada said seven shippers have signed precedent agreements and subscribed for almost all of the 700 MMcf/d firm transportation service along the Lake Erie Crossing. "This application reflects our commitment to provide customers with the downstream connections they need to take advantage of lucrative U.S. Northeast and Mid-Atlantic markets," said John Carruthers, vice-president of business development for TransCanada Energy Transmission.

Meanwhile in concert with the progress on the Canadian side of the border, Millennium sponsors expressed optimism that they are making progress on the regulatory front in the U.S. Project Manager David Pentzien said he expects Millennium to receive its first regulatory green light from FERC in January and be well on its way to meeting a winter 2000 in-service date.

The in-service date of the $650 million project from Lake Erie to New York was questioned in September by FERC staff because sponsors were not meeting data requests on a timely basis. "We were just starting to open the flood gates in the September-October time frame," said Pentzien, "so in retrospect it looks like they made their comments based on what they had. What they received over the next two months basically [met] every outstanding environmental data request so I think they're probably in a different position at this point. I think they would probably say we are back on schedule."

Pentzien said he still expects to receive the final environmental impact statement and the final order from FERC in June or July. But he said even if FERC is a couple months late with its final order on the project, it wouldn't delay the in-service date. "It's really a two-year construction window. I think what we're saying is even if we were to hit a delay of a month or two on the certification we still have some time to make that up given the two-year construction schedule." He expects FERC will issue a preliminary determination on non-environmental grounds and a draft environmental impact statement in January "given what we've supplied to them."

Pentzien said some of the environmental aspects of Millennium that were expected to be huge hurdles turned out to be speed bumps. "Lake Erie has become a very manageable process." He said the biggest obstacles have been things thrown in the way by competitors. Competitors have drawn FERC's attention to all sorts of environmental issues that really aren't environmental issues at all, he said. Landowners haven't been much of a problem because Millennium utilizes such a significant amount of existing right of way: 86% of the line. "We're seeing about one-seventh the landowner protests that Independence [Pipeline] is," he said. "We're talking almost a whole order of magnitude less than Independence." Independence is a Millennium competitor proposed to cross Ohio and end in western Pennsylvania at the Leidy Hub where it will connect with a downstream project.

Pentzien also noted the markets along the Millennium project have grown substantially. He mentioned Southern Company buying Orange and Rockland's power generation. "You don't buy existing assets and let them sit there and not run. They are very interested in upgrading and consuming more natural gas. With the recent announcements by American National Power and Sithe, we've got 2,000 MW that are within 3,000 feet of Millennium over on the extreme east side. The last year had a marked increase on the power plant side."

Rocco Canonica

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