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Vector Holds Open Season

Vector Holds Open Season

The Vector Pipeline project, a proposed $470 million pipeline extending from Chicago to the Dawn hub in Ontario, is currently holding an open season through May 19. Vector said it is focused on selling the 300 MMcf/d dedicated to come online when its Highland compressor station is put in service in 2001. The open season started last week.

Each prospective gas shipper will have the option to bid by letter agreement either on a negotiated rate or recourse rate basis. Project managers said this open season approach is intended to provide shippers with the maximum flexibility to design their bid to meet their needs.

In the event of over-subscription, capacity will be allocated among shippers on a non-discriminatory basis, based on net present value and term. Open season information and terms are posted on Vector's website at www.vector-pipeline.com.

Vector is a joint venture between Calgary-based Enbridge Inc., Detroit-based MCN Energy Group and Westcoast Energy Inc. of Vancouver. Its target in-service date is this October. The goal of the project is provide a competitive additional supply source at Dawn and to serve key markets in Ontario, Quebec, the Midwest and Northeast regions of the United States. Vector was one of the first of several proposed Chicago to Northeast pipelines to win FERC approval. The Commission approved the project in May 1999 (see NGI, May 31).

The pipeline will have an initial delivery capacity of approximately 700 MMcf/d. All of that load is fully subscribed as a result of an open season held in 1997. The capacity is scheduled to increase, however, to 1 Bcf/d following completion of the Highland station in Michigan. A Vector representative also said the line can be cost-effectively expanded to 1.5 Bcf/d with added compression.

"We'd really like to reach 1.5 Bcf/d," said Anthony Zlahtic, a Vector spokesman. "With this open season, we'll test the waters, and our main focus is to use up that 300 MMcf/d of unsubscribed capacity. If demand warrants more, who knows? We could add more compression if the situation is right."

John Norris

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