Alliance Pipeline, the largest initial pipeline project in NorthAmerica, is on track to begin service on its scheduled date of Oct.1, the project’s CEO said yesterday. All of the construction goalsfor 1999 have been met and currently 77% of the mainline has beeninstalled.

“I am very pleased to report that our 1999 construction programhas been completed on schedule and within our overall budget,” saidNorm Gish, Alliance CEO. “On Monday Nov. 29, we completed anhistoric weld at the Saskatchewan-North Dakota border symbolicallylinking together the product of this year’s work by almost 7,000people on both Canadian and American crews.”

More than 80% of both the Canadian and American 36-inch pipelinehas been installed and the rest will be finished by the end of thiscoming summer, the company said. The 42-inch pipeline, however, isnot as far along as less than 20% of it has been installed in boththe Canada and U.S. portions. Alliance said large portions of the42-inch pipe will be installed this winter.

The pipeline company also said construction of 21 compressorstations on both the mainline and laterals is continuing onschedule as is the Aux Sable Liquids Products site.

Construction on the project began in the fourth quarter of lastyear. The C$3.7 billion Alliance pipeline would ship 1.3 Bcf/d ofgas to Chicago.

The addition of Alliance, along with the expected operations ofMaritimes and Northeast Pipeline and the recent start of the NorthernBorder expansion, have led to industry-wide speculation on gasprices. Last month, Larry Larsen, a vice president at Williams GasPipeline-West, predicted that western prices, such as Sumas and SanJuan Basin price points could be radically affected when Alliancebecomes operational. Larsen projected that Alliance will help boostprices at such western points as Kingsgate, Sumas and major spotlocations in the Rockies from recent levels in the $2.10s, $2.20s and$2.30s to solid base positions in the $2.70s and $2.80s by 2005 (seeDaily GPI, Nov. 12).

Some say the effects already are being felt. Canadian analystspointed out last month that in the second quarter of 1999, Canadianexports under long-term contracts (two years or more) fetched anaverage US$2.12 per MMBtu, up 11 cents or 5% from the first quarter ofthis year. Short-term deals, which now account for 57% of Canadianexports, averaged US$1.92, up 16 cents or 9% (see Daily GPI, Nov. 2)

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