After a delayed start pushed into mid-January (see Daily GPI, Jan. 19), TransCanada Corp. has its new 303-mile, 30-inch diameter Bison Pipeline operating at near 90% capacity bringing Rockies supplies to the Midwest via an interconnection with Northern Border Inc., a U.S.-based company executive told NGI Thursday.

However, the once bullish growth projections for the pipeline are scaled back considerably for the near-term.

When approved by the Federal Energy Regulatory Commission (FERC), the Bison project was authorized for one compressor and a maximum capacity of 477 MMcf/d. At the pipeline's request FERC subsequently granted a two-year delay on installing the compression, and the maximum throughput now is 407 MMcf/d, including four shippers, each with 10-year transportation deals.

Dean Ferguson, TransCanada's Houston-based vice president for U.S. pipelines in the West, said while the new pipeline will always be looking for expansion opportunities they are not expected to develop in the near term. The Powder River Basin supplies in Wyoming, the current source of Bison's shippers, is expected to stay flat in the 1-1.5 Bcf/d range, so any growth would most likely entail Bison expanding further into the Rockies to other supply areas, Ferguson said.

Several years ago when Bison was moving through the permitting process some supply projections for Powder River envisioned it growing to the 2-4 Bcf/d range of production. Ferguson said no one is making such projections in the current market. There was also talk at the time of a second phase to take Bison to 1 Bcf/d capacity, but Ferguson said there is no timetable for the second phase at this time.

"Certainly we'll pursue the growth of Bison as activity levels pick back up in the Rockies," Ferguson said. "We'll be looking for ways to continue to grow Bison [longer term], but our immediate focus is on making sure we can get the necessary underpinning to proceed with the compression expansion [in the next two years],” taking the project to the 477 MMcf/d level.

"Obviously, later we would continue to look for growth beyond that. We don't have a timetable, but we're always interested in that growth. We'll pursue it actively."

While he said the underlying market and production growth has not kept up in the Power River Basin, Ferguson is sure the over time the economics will change, and he won't be surprised when activity levels pick up again.

"Part of the overall opportunity for Bison includes the potential to extend further into the Rockies for other basins in order to access other parts of the region where there is growth," he said. "We will continue to look at all of those things and continue to grow in any or all of them."

Ferguson also confirmed that part of the delay in starting Bison this winter was an offshoot of the post-San Bruno pipeline incident and the federal Pipeline and Hazardous Materials Safety Administration's (PHMSA) "higher level of scrutiny" regarding the pipeline's construction practices and records. "It was one of the things that drove the extended schedule as we were completing the work," Ferguson said.

Nevertheless, the new pipeline running from northeastern Wyoming through a corner of Montana and across parts of North Dakota has moved from the construction phase to fully operational status, Ferguson said. "Commissioning activity is complete, including having satisfied PHMSA that we have met all the requirements from a construction perspective," he said.

©Copyright 2011 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.