Soaring California gas prices and rapidly rising gas demandmainly for power generation the Pacific Northwest and Californiahas prompted an expansion of the PG&E Gas TransmissionNorthwest (GTN) system. The pipeline said last week it plans tofile with FERC in April for a small initial expansion project fornext year but potentially could add 1 Bcf/d of capacity over thenext decade.

In addition, upstream transporters TransCanada PipeLines andNova Gas Transmsission also said last week they are looking intoexpanding their British Columbia and Alberta systems to matchPG&E’s efforts downstream. They have requested correspondancewith all of their shippers to estimate their future needs anddetermine how much capacity should be added.

The GTN project would add 200 MDth/d of firm transportationcapacity to its mainline although a recent open season attracted 25bids, totaling 2,138 MDth/d of capacity. GTN said 200 MDth/d wasthe maximum it could do under the circumstances and under itsexisting 26-cent maximum rate for FT.

“Our effort is going to be on getting this expansion on line asquickly as we can,” said GTN spokeswoman Sandra McDonough. “We’vealready done a lot of the environmental work as part of a proposedexpansion a couple years ago. Plus we can do this without anydownstream expansion and we can do it at our existing rate. We’retrying to get it online before the summer of 2002.”

Much of the new capacity, which will be added to GTN’s mainlinebetween Kingsgate, BC, and Malin, OR, is expected to serve newelectric generation plants in the region. The pipeline project isexpected to be in service in June 2002. It will require theaddition of 21 miles of 42-inch diameter looping north of Spokane,WA, as well as additional compression at five existing stations.

Peter Lund, vice president for PG&E’s National Energy Group,parent company of GTN, said the plan is to move forward with thisexpansion quickly and “consider our options to do further capacityadditions in the years ahead.”

“What we’ve talked about is expanding the system as much as 1Bcf/d over the next decade, depending on where the market is,” saidMcDonough. “We’ll move forward on this expansion, see how it worksand then at the right time probably go back to the market again forthe next increment.”

The GTN system has been operating near 100% capacity. Its entirecapacity is fully subscribed with an average contract term expiringin 2013. The 1,335-mile system has a capacity to transport 2,700MDth/d of gas from Canada, making it the largest U.S. transporterof Canadian natural gas.

GTN’s plan caught the eye of TransCanada, which told shippers onits Nova system in Alberta and its BC System in British Columbiathat it would undertake a capacity rationalization program thatwould go into effect starting in November 2002. Results ofdiscussions with its shippers will determine whether an expansionis necessary, the company said.

Rocco Canonica

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