While just a smidgen of its project would be in Canada, Vectorstill needed – and got yesterday – approval from Canada’s NationalEnergy Board (NEB). “This is a significant milestone and supportsVector’s status as the most advanced project to meet increasingdemand for natural gas for markets east of Chicago,” said VectorVice President Juri Otsason. Vector expects to receive finalcertification from the Federal Energy Regulatory Commission (FERC)in the second quarter, which will represent the final step inregulatory approvals.

The NEB found Vector to be “economically feasible” based onavailable gas supply, markets and shipper commitments. “The Boardis also of the view that Vector will contribute to increasedsecurity of supply and liquidity in Canadian markets.

“TransCanada argued that some of its shippers could be harmedbecause of Vector. However, Vector does not expect a lengthy periodof excess pipeline capacity in eastern Canada. The Board finds noevidence of the certainty or magnitude of potential harm and is notpersuaded that it would be significant.”

The total Vector project will consist of about 343 miles ofpipeline. In Canada, Vector plans to construct and operate about 15miles of pipe, extending from a point along the internationalboundary in the St. Clair River near Sarnia, ON, to a point nearDawn. The estimated capital cost of the Canadian portion of theproject is $35.4 million.

Vector plans to be in service by Oct. 1, 2000 and intends tobegin construction of some segments of the pipeline, includingcritical river crossings, in 1999. Full delivery capacity of thepipeline, which will transport gas from Chicago, IL, to Dawn, ON,will be 1 Bcf/d.

The Vector project is a joint venture of Calgary-based EnbridgeInc. and Detroit-based MCN Energy Group Inc. Vector is designed totransport western Canadian and U.S. sourced gas from the rapidlyexpanding Chicago hub, where it will interconnect with NorthernBorder Pipeline’s extension and the Alliance Pipeline, to growingmarkets in eastern Canada and the midwestern and northeasternregions of the United States. The Board’s decision follows anenvironmental screening of the facilities and a public hearing.

Vector took the lead among the pipelines intended to move gaseast from Chicago when it won preliminary approval onnon-environmental grounds from FERC back in October, putting itahead of competitors TriState Pipeline, Independence Pipeline andthe Tennessee Eastern Express projects.

In a draft order, the Commission said no evidence was producedto demonstrate Vector was not required by the public convenienceand necessity. Vector is to bear the full risk of building the $447million pipeline because it filed for an optional certificate (OC),which allows an applicant to gain Commission authorization for aproject without demonstrating market demand for services.

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