TransCanada, National Fuel Propose 215-Mile Pipeline

TransCanada PipeLines Ltd. and National Fuel Gas Co. last Wednesday proposed a new 215-mile, 30-inch natural gas pipeline project that would provide initial capacity of 500 MMcf/d from Dawn, ON to the Ellisburg-Leidy area in Pennsylvania. The companies said they made the decision to begin the Northwinds Pipeline, which will cost $350-$400 million, after examining initial technical, environmental and market assessments in Canada and the United States.

While not replacing the proposed Ontario-to-New York Millennium Pipeline proposal that for now has been shelved (see NGI, Aug. 27), TransCanada spokesman Glenn Herchak said Northwinds "could be considered for an upstream connection for Millennium... I wouldn't say that Northwinds is a replacement. TransCanada has a 21% ownership interest in the Millennium Pipeline. I would say that Northwinds could be an option for fuel connections in the future."

Just two weeks ago, TransCanada and St. Clair Pipelines Ltd., sponsors of the Canadian leg of the long awaited Millennium Pipeline, withdrew their applications from the National Energy Board (NEB). However, they retained the option to re-file "analogous applications if and when appropriate," according to a letter sent to the NEB. The withdrawal was prompted partly because of regulatory delays with the U.S. portion of the line, as well as community protests in that portion of the line that would travel through Westchester County, NY. The application to build the pipe has been pending at the Federal Energy Regulatory Commission since 1997.

The Northwinds project will originate in Kirkwall, ON, cross into the United States near Buffalo, NY, and follow a southerly route to its destination in Pennsylvania. Although not yet finalized, the route would use existing utility corridors and rights-of-way to the best extent possible in an effort to mitigate effects of the construction activity. The project also is expected to include a tunnel, which would cross the border from Canada into the United States.

"The Northwinds Pipeline is uniquely positioned to be a part of a solution for long-term energy security by building upon existing energy infrastructures and bringing new, low-cost natural gas supplies to growing markets on the East Coast," said National Fuel CEO Bernard J. Kennedy. He called National Fuel's participation a "strategic and logical fit" because its existing systems are located at the Canada-U.S. border and could reach markets in western New York, northwestern Pennsylvania "and beyond."

Currently, more than 3.5 Bcf/d of transport capacity and more than 870 Bcf of storage capacity are fed into the Dawn regional hub. Through interconnections along the route and in the Ellisburg-Leidy area, Northwinds would have access to more than 5 Bcf of capacity on interstate pipe systems that supply the East Coast markets, said the companies in a written release.

TransCanada and National Fuel expect to issue a public offering or open season for service on the pipeline this fall, but no date was given. Following the offering or open season, the companies then anticipate filing applications with FERC this year and with the NEB in the spring of 2002. Construction will take an estimated 16-20 months, and the targeted in-service date is late 2004, depending on when applications are approved.

"This project will strongly enhance TransCanada's existing and proposed natural gas transportation systems, from the Western Canada Sedimentary Basin to eastern Canada to the northeastern United States," said Hal Kvisle, TransCanada's CEO.

TransCanada, headquartered in Calgary, currently has a network of about 38,000 kilometers of pipeline that transports most of western Canada's natural gas production to markets in Canada and the United States. It owns, controls or is developing about 1,900 MW of power generation. National Fuel, an integrated energy company headquartered in Buffalo, has six operating segments: utility, pipeline and storage, exploration and production, international, energy marketing and timber.

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