The growth in Canada’s natural gas supply is moving northwardand at some point is expected to be “within reach” of Alaska, wherethe United States has “huge reserves” of gas. If this trendcontinues, the still-under-construction Alliance Pipelineconceivably one day could be transporting both Canadian and Alaskangas supplies, an executive with the pipeline said.

One of three schemes being considered to transport Alaska NorthSlope gas to the U.S. market “potentially” could involve Alliancein the future, noted Jack Crawford, senior vice president forpublic government and regulatory affairs with the Calgary-basedAlliance. However, he said the pipeline wasn’t “actively” pursingthis angle at this time, given that it’s still “fully occupied”with the construction of the Canada-to-Chicago Alliance project,which is targeted to begin operation “full steam” next October.

Speaking at the winter meeting of the National Association ofRegulatory Utility Commissioners (NARUC) in Washington D.C. lastweek, he said he doubted that Alliance would be immediatelyaffected by the FERC’s hold-up of projects that would transportsome of Alliance’s 1.3 Bcf/d of gas from Chicago to East Coastmarkets.

“It may have a longer term effect, but it won’t have ashort-term effect because our capacity is essentially sold out for[the next] 15 years,” Crawford told NGI. If the take-away projectsaren’t certificated eventually, however, “it may delay expansions”of the Alliance system in the future. Alliance is counting onVector Pipeline, which has been certificated and is underconstruction, to handle much of the gas overflow.

As for the Alliance pipeline itself, which has four sponsors,Crawford said it has incurred some construction overruns. But theyhave been “very localized,” occurring mostly in North Dakota, andhave been “relatively modest” in amount. The sponsors includeCoastal Corp., Williams, Enbridge Inc. (formerly IPL Energy) andthe Fort Chicago Energy Partners.

The pipeline recently began to put gas into the system, about200 MMcf, he noted. That’s just the first injection ofapproximately 8 Bcf of natural gas that Alliance plans to put inbetween now and next October, when it begins operation.

Crawford estimated Alliance still has about 120 miles toconstruct on the U.S. side of its mainline, and about 180 milesmore to go on the Canadian side. But there’s still “considerablymore work to be done” on the lateral portion of its receipt system.

Crawford said the ‘biggest task…has been that of dealing withlandowners,” about 6,000 of them. But he said Alliance was able toreach voluntary agreements with all but less than 1%.

Once Alliance is operating, it’s expected that Canadian gasexports to the U.S. market will rise to between 10 Bcf/d and 12Bcf/d in early 2001, which translates to about 4-4.5 Tcf per year.That’s compared to last October’s gas export volumes of 8.9 Bcf/d.

There isn’t likely to be a let-up in Canada’s growth. ToddPersells, assistant vice president for project development andmarketing at ANR Pipeline, said forecasts for 15 years out indicateCanadian exports will grow by 25%, and Canadian production willrise by 33%.

It’s estimated Canada has “ultimate marketable potential” gasreserves of 662 Tcf, almost half of which (350 Tcf) derive from theWestern Canada Sedimentary Basin — where the Alliance Pipelineoriginates. The estimates are from the Canadian Gas PotentialCommittee and the NEB.

In the past three to four years, Canadian producers have beenadding to reserves at a rate of 4 Tcf per year. “This has been dueto mostly offshore and above-average drilling activities in theWestern Canada Sedimentary Basin,” said Neil McCrank, chair of theAlberta Energy Utilities Board, who also spoke at the NARUCmeeting.

Susan Parker

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