The Federal Energy Regulatory Commission last week awardedNorthern Border Pipeline a certificate to build its Project 2000extension into northern Indiana, which would provide the state’scustomers access to Canadian gas supplies for the first time.

The project would extend Northern Border’s pipeline fromManhattan, IL, to North Hayden, IN, where it would interconnectwith Northern Indiana Public Service Co. (NIPSCO), and wouldaugment compression on two segments of its existing system. Itwould raise the design capacity between Ventura, IA, and Harper to1.48 Bcf/d, and the design capacity between Harper and Manhattan to844 MMcf/d

When the 34-mile extension is completed, Northern Border’ssystem will span from the U.S.-Canadian border in Montana toNIPSCO, a major Midwest LDC which has large industrial loadrequirements and annual deliveries in excess of 300 Bcf.

“The benefits of the project include, among others,the…..demonstration of a market demand, the introduction ofCanadian supplies into the northern Indiana market, the integrationof the Chicago and northern Indiana markets, and opportunities forexisting shippers to enter a new market,” FERC said [CP-21].

“This project strategically positions us to move natural gaseast of Chicago, and continues our planned growth into new anddiversified markets, including the growing power generationmarkets,” said Larry L. DeRoin, chairman of Northern BorderPartners L.P., which owns a 70% interest in the pipeline.

The extension will have a capacity of 544 MMcf/d, and wouldserve five shippers under 10-year contracts, including El PasoEnergy Marketing, Bethlehem Steel., NIPSCO, Peoples Energy Servicesand Peoples Gas Light and Coke.

Northern Border has twice amended the project, which it filedwith FERC in October 1998. The existing proposal reduces thediameter of the pipeline from 36 inches to 30 inches and eliminatessome cooling equipment, cutting the cost of the project from $189million, to $94 million.

Natural Gas Pipeline Co. of America and ANR Pipeline have hotlycontested Northern Border’s Project 2000, saying that it didn’tcomply with the Commission’s policy statement on benefits vs.adverse effects.

Both Natural and ANR insisted Northern Border’s existingshippers would be forced to subsidize part of Project 2000. But theCommission said “no shipper would be harmed,” and, in fact,system-wide rates would decrease once the costs of the project arerolled in. Northern Border has more than justified the need for theproject by submitting precedent agreements for all of the newcapacity to be created, it noted.

Susan Parker

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