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Bison, Pathfinder Projects Could be Combined

Northern Border Pipeline Co. has sold Bison Pipeline LLC to TransCanada Pipeline USA Ltd., setting the stage for a possible combination of the Bison Pipeline Project with TransCanada's proposed Pathfinder Project in order to tap Rockies supplies for midwestern markets.

TransCanada will provide Bison shippers the opportunity to transport their production on the larger Pathfinder. Pathfinder has received shipping commitments that are subject to certain conditions and TransCanada is currently working with Pathfinder shippers to satisfy these conditions. If these conditions cannot be met in a timely manner, then TransCanada has agreed, subject to certain conditions, that it will proceed with the smaller Bison Project.

"The work completed to date on the Bison Project complements the significant advances we have made on our Pathfinder Pipeline Project," said TransCanada Corp. CEO Hal Kvisle. "This acquisition ensures that, either via Pathfinder or Bison, TransCanada will provide transportation services for U.S. Rockies producers who are interested in moving their growing natural gas production to U.S. Midwest markets."

Bison assets include precedent agreements, as well as regulatory, environmental and engineering activities completed on the Bison Pipeline Project. Project subscription stands at 405 MMcf/d. Northern Border will retain the executed downstream contract for capacity from Port of Morgan, MT, to Ventura, IA, on the Northern Border system.

"This transaction positions the Bison Project to potentially combine with TransCanada's proposed Pathfinder Project that would interconnect with the Northern Border system," said Northern Border Vice President Paul F. Miller. "The success of Bison or Pathfinder would significantly diversify natural gas supply and potentially increase demand for transportation services on the Northern Border Pipeline, which serves the Chicago and Midwest markets."

Northern Border is owned by TC PipeLines LP and and ONEOK Partners LP. TransCanada has committed to proceed with constructing Bison, pending the removal of contingencies, or combining it with the proposed Pathfinder Pipeline Project.

The proposed 289-mile, 24-inch diameter Bison system would extend from gas gathering facilities in the Powder River Basin to a point of interconnection with the Northern Border system in Morton County, ND. The initial capacity of Bison is anticipated to be approximately 400 MMcf/d. The projected in-service date is late 2010.

Pathfinder would be an approximately 625-mile, 36- and 42-inch diameter interstate pipeline that would transport gas northeast from Meeker, CO, through Montana to the Northern Border system in North Dakota for delivery into the Ventura and Chicago-area markets. Initial capacity would be 1.2 Bcf/d with an ultimate capacity of 2 Bcf/d. The anticipated Pathfinder in-service date is late 2010.

In May TransCanada said affiliates of Enterprise Products Partners LP and Quicksilver Gas Services LP signed a memorandum of understanding under which Enterprise and Quicksilver would acquire up to an aggregate 50% ownership in the Pathfinder project and commit to ship a total of 500 MMcf/d for a 10-year term (see NGI, May 19).

A segment of Pathfinder would follow the same route as the proposed Bison project, in which TransCanada is partial owner through its interest in TC PipeLines. Bison launched a binding open season in April (see NGI, April 14). In May a subsidiary of Anadarko Petroleum Corp. agreed to be a foundation shipper on Bison (see NGI, May 19).

In June Alliance Pipeline Inc. and Questar Overthrust Pipeline Co.'s proposed Rockies Alliance Pipeline (RAP) -- which would transport gas from Opal and Wamsutter, WY, and Meeker, CO, to Alliance Pipeline delivery points in the Chicago area -- received a "positive response" from prospective shippers during an open season (see NGI, June 30).

Earlier this year TransCanada along with Williams proposed a east-to-west Rockies pipeline called Sunstone Pipeline (see NGI, June 23). Sunstone would be a 618-mile, 42-inch diameter pipeline with capacity of up to 1.2 Bcf/d. The project, which is proposed for service in 2011, would involve constructing a new pipeline substantially parallel to the existing Williams Northwest Pipeline system between the Opal Hub in Wyoming and Stanfield, OR. The Northwest system interconnects at Stanfield with TransCanada's Gas Transmission Northwest (GTN) pipeline system.

With more than 1.1 Bcf/d in binding commitments from customers under 10- to 15-year contracts, El Paso Corp. subsidiary Ruby Pipeline LLC is moving ahead with its proposed pipeline to carry natural gas from Rocky Mountain basins to the West Coast, it said in June (see NGI, June 30). Meanwhile, another Rockies pipeline proposal by Spectra Energy Corp., which would have carried gas to the West Coast, apparently had been canceled. Spectra had proposed the Bronco Pipeline late last year to move more than 1 Bcf/d of gas 650 miles from Wyoming to a terminus on the California-Oregon border near Malin, and in January it launched an open season to test support (see NGI, Jan. 14).

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