Moving one step closer to bringing 1.325 Bcf/d of gas fromWestern Canada to Chicago, Alliance Pipeline announced the start ofconstruction with the clearing of 410 miles of forestedrights-of-way for mainlines and laterals in northwestern Albertaand northeastern British Columbia. The entire system is expected tobe completed and in service by October, 2000. Alliance said italready has commitments from 37 shippers for 15-year contractsworth a total of $8.2 billion.

In preparation for construction, over 560 miles of pipe weighing370,000 tons have been shipped from pipe mills in Canada and theU.S. to staging and stockpiling sites along the route. Constructionfor the lateral pipeline facilities will begin later this year,Alliance said.

“With the decisions made in the past weeks and months, Allianceand Aux Sable have transitioned from a proposed project into theconstruction phase for the infrastructure that will underpin twosubstantial new businesses,” said Dennis Cornelson, CEO ofAlliance. “[Alliance’s gas transmission and natural gas liquidsbusinesses] have unique and strong competitive advantages in theNorth American energy business that will allow them to createsignificant value for shippers, customers, and shareholders.”

The $1.6 billion (C$2.4 billion) Canadian component of thepipeline will begin construction June 1. Alliance Pipeline Ltd.will build, own and operate this 1,445 mile pipeline system.

The 875 miles of the U.S. portion will be constructed and ownedby Alliance Pipeline Inc. and will cost $1.4 billion (C$2.1billion). The U.S. segment construction will begin May 15.

Also on May 15, Aux Sable Liquids Products Inc. will startbuilding the pipeline’s natural gas liquids (NGL) extraction andfractionation facilities. The Channhon, IL, facilities will cost$365 million (C$550 million) and initially process 1.6 Bcf/d. Theywill also remove 40,000 barrels per day (b/d) of ethane, 8,000 b/dof butane, and 3,000 b/d of pentanes-plus.

Although Alliance Pipeline gained the necessary certificationfrom Canada’s National Energy Board (NEB) and FERC, Jack Crawford,Alliance’s vice president, public, government and regulatoryaffairs, admitted details still need to be worked out. “Thesethings did not come as a surprise to us, but there are someregulatory details we still need to clear up. They are mostly on anindividual level and they are mostly environmental disturbanceissues in forested areas. We’ll handle them on a case-by-case basisand we don’t expect these matters to effect construction.” Includedin these individual environmental cases are 38 objections toAlliance’s route brought before the NEB by Canadian landowners. Thehearings will begin April 12.

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