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KN Targeting IL, WI With New Project

KN Targeting IL, WI With New Project

Undeterred by those who have gone before it and failed, KN Energy jumped into the fray with a pipeline project to serve northern Illinois and southern Wisconsin.

The Horizon Pipeline would be a 129-mile, high-pressure line from Joliet, IL, to Hales Corners, WI. The 36-inch pipeline would transport between 630 MMcf/d and 1.2 Bcf/d upon completion, which is proposed for fall 2001. Construction is to begin in spring 2001, and the estimated cost is $150 million to $250 million, depending on shipper response and design capacity.

Horizon Pipeline would begin at the emerging gas supply hub near Joliet, where the interconnection of several pipelines offers access to gas supply and a variety of storage and hub services. The pipeline would connect with Natural Gas Pipeline Company of America (NGPL), a subsidiary of KN Energy, and with Nicor Gas and the Alliance Pipeline. Potential connections to other pipelines are being reviewed. NGPL would operate Horizon, and KN plans to jointly own the pipeline with one or more other partners.

"We're proposing Horizon Pipeline to accommodate the continued growth and increasing need for additional gas supply in northern Illinois and southern Wisconsin," said Rick Wells, KN executive vice president. "This project brings additional natural gas, supply diversity and competitive storage services into a fast-growing region of the Midwest. The proposed pipeline will make use of a great deal of existing infrastructure of pipe systems, equipment and rights-of-way which will help keep costs down and minimize environmental impact."

Scott Parker, KN director of business development, said the company already has a strong relationship with customers who could use the new pipe as it serves southern Wisconsin through NGPL already. He said KN is talking to Wisconsin LDCs and is eyeing the potential for power generation load in the region. He would not speculate on what percentage of Horizon throughput could end up serving power generators. As Horizon is a stand-alone pipeline, it will have its own tariff with rates yet to be determined, Parker said. "We're going to be extremely competitive.."

By using existing facilities and rights-of-way and minimizing new pipe, Horizon would be able to deliver gas to Wisconsin Electric Power Co.'s system in Milwaukee and Racine counties, WI, and NGPL's and Nicor Gas' systems in McHenry County, IL. In addition, there is potential to connect to North Shore Gas Co.'s system in Cook and Lake counties, IL. Based on potential shipper demand, Wisconsin Gas' distribution system can be connected with the addition of a short lateral.

Wisconsin Gas, however, already has signed up for 650 MMcf/d of firm capacity on the competing Guardian Pipeline, another new interstate line planned to serve northern Illinois and southern Wisconsin. Guardian is holding an open season through June 3. The pipeline would have a minimum capacity of 650 MMcf/d and would be expandable, depending on the market, to up to 1.1 Bcf/d. The project's planned in-service date is Nov. 1, 2002. Guardian would transport gas from interconnections with Alliance, Northern Border, NICOR, Midwestern, NGPL and the proposed Tristate Pipeline near Joliet, IL, to the Watertown, WI, area. The project is jointly owned by WICOR, CMS Energy Corp. and Viking Gas Transmission, with each holding a one-third interest.

Others have tried targeting the Wisconsin market and failed. The Illinois-Wisconsin Express Project - backed by Peoples Energy, Northern Border, El Paso Energy, and Enron - has been put on indefinite hold. And TransCanada PipeLines and Nicor Inc. late last year scrapped plans for their reconfigured Voyageur Pipeline (see Daily GPI Nov. 5, 1998). Peoples Energy and Northern Border have given signals they might go ahead with a Wisconsin project on their own.

Meanwhile, Coastal's ANR in March applied to the Federal Energy Regulatory Commission for another expansion of its Wisconsin system to add nearly 200 MMcf/d of capacity for in-service November 2000 (see Daily GPI March 9, 1999).

A Horizon open season will begin this month. Shippers seeking additional information on the project can contact Scott Parker, KN director of business development, at (630) 691-3689.

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