Alliance is Right on Track
Alliance Pipeline, the largest initial pipeline project in North
America, is on track to begin service on its scheduled date of Oct.
1, 2000, the project's CEO said last week. All of the construction
goals for 1999 have been met and currently 77% of the mainline has
"I am very pleased to report that our 1999 construction program
has been completed on schedule and within our overall budget," said
Norm Gish, Alliance CEO. "On Monday Nov. 29, we completed an
historic weld at the Saskatchewan-North Dakota border symbolically
linking together the product of this year's work by almost 7,000
people on both Canadian and American crews."
More than 80% of both the Canadian and American 36-inch pipeline
has been installed and the rest will be finished by the end of this
coming summer, the company said. The 42-inch pipeline, however, is
not as far along as less than 20% of it has been installed in both
the Canada and U.S. portions. Alliance said large portions of the
42-inch pipe will be installed this winter.
The pipeline company also said construction of 21 compressor
stations on both the mainline and laterals is continuing on
schedule as is the Aux Sable Liquids Products site.
Construction on the project began in the fourth quarter of last
year. The C$3.7 billion Alliance pipeline would ship 1.3 Bcf/d of
gas to Chicago.
The addition of Alliance, along with the expected operations of
Maritimes and Northeast Pipeline and the recent start of the
Northern Border expansion, have led to industry-wide speculation on
gas prices. Last month, Larry Larsen, a vice president at Williams
Gas Pipeline-West, predicted that western prices, such as Sumas and
San Juan Basin price points could be radically affected when
Alliance becomes operational. Larsen projected that Alliance will
help boost prices at such western points as Kingsgate, Sumas and
major spot locations in the Rockies from recent levels in the
$2.10s, $2.20s and $2.30s to solid base positions in the $2.70s and
$2.80s by 2005 (see NGI, Nov. 15).
Some say the effects already are being felt. Canadian analysts
pointed out last month that in the second quarter of 1999, Canadian
exports under long-term contracts (two years or more) fetched an
average US$2.12 per MMBtu, up 11 cents or 5% from the first quarter
of this year. Short-term deals, which now account for 57% of
Canadian exports, averaged US$1.92, up 16 cents or 9% (see NGI,
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