Northern Border Extension Project Gets Green Light
The Federal Energy Regulatory Commission last week awarded
Northern Border Pipeline a certificate to build its Project 2000
extension into northern Indiana, which would provide the state's
customers access to Canadian gas supplies for the first time.
The project would extend Northern Border's pipeline from
Manhattan, IL, to North Hayden, IN, where it would interconnect
with Northern Indiana Public Service Co. (NIPSCO), and would
augment compression on two segments of its existing system. It
would raise the design capacity between Ventura, IA, and Harper to
1.48 Bcf/d, and the design capacity between Harper and Manhattan to
When the 34-mile extension is completed, Northern Border's
system will span from the U.S.-Canadian border in Montana to
NIPSCO, a major Midwest LDC which has large industrial load
requirements and annual deliveries in excess of 300 Bcf.
"The benefits of the project include, among others,
the.....demonstration of a market demand, the introduction of
Canadian supplies into the northern Indiana market, the integration
of the Chicago and northern Indiana markets, and opportunities for
existing shippers to enter a new market," FERC said [CP-21].
"This project strategically positions us to move natural gas
east of Chicago, and continues our planned growth into new and
diversified markets, including the growing power generation
markets," said Larry L. DeRoin, chairman of Northern Border
Partners L.P., which owns a 70% interest in the pipeline.
The extension will have a capacity of 544 MMcf/d, and would
serve five shippers under 10-year contracts, including El Paso
Energy Marketing, Bethlehem Steel., NIPSCO, Peoples Energy Services
and Peoples Gas Light and Coke.
Northern Border has twice amended the project, which it filed
with FERC in October 1998. The existing proposal reduces the
diameter of the pipeline from 36 inches to 30 inches and eliminates
some cooling equipment, cutting the cost of the project from $189
million, to $94 million.
Natural Gas Pipeline Co. of America and ANR Pipeline have hotly
contested Northern Border's Project 2000, saying that it didn't
comply with the Commission's policy statement on benefits vs.
Both Natural and ANR insisted Northern Border's existing
shippers would be forced to subsidize part of Project 2000. But the
Commission said "no shipper would be harmed," and, in fact,
system-wide rates would decrease once the costs of the project are
rolled in. Northern Border has more than justified the need for the
project by submitting precedent agreements for all of the new
capacity to be created, it noted.