Opponents of Alliance Pipeline Project have dealt it a schedulesetback of nine months to a year, but remain far from breaking upits supporting coalition of gas producers and transporters.

As Alliance confirmed its in-service date was pushed back to thesecond half of 2000 from Nov. 1, 1999 because of “current realitiesof the Canadian regulatory process,” prospective shippershighlighted the extent of support for the proposed route toChicago. Representatives of aggregator ProGas Ltd. told theNational Energy Board that 92.5% of 170 producers in its supplypool voted in favor of its capacity booking on Alliance. The poolis a cross-section of Canadian producers, marketing 1.3 Bcf/d ofgas drawn from 4 Tcf of reserves in the Western Sedimentary Basin.

The ProGas witness panel voiced in a nutshell the consensusamong producers who initiated Alliance and continue to back itafter selling off majority ownership to pipeline companiesincluding IPL Energy, Westcoast Energy, Coastal Corp., Duke Energyand Mapco-Williams. Like other marketers and producers holdingcapacity on Alliance, ProGas also has space – and is keeping it -on the traditional mainstays of Canadian gas transportation: NovaCorp., TransCanada PipeLines, Iroquois, Great Lakes GasTransmission, Alberta Natural Gas, Pacific Gas andFoothills-Northern Border (including its expansion-extensionproject currently under construction). But ProGas said it has amandate from its supply pool to be “a firm believer in the benefitsof having a diverse portfolio with respect to end-users, geographicmarkets and transport routes.” As a bonus, Alliance represents “acompetitive alternative to existing pipeline systems.”

The “current realities” faced by Alliance are NEB hearings thathave stretched into a marathon since last November, thanks largelyto resistance by the pipeline and petrochemical arms of Nova,including Foothills, but also to extended questioning byenvironmental groups. After sessions along the route in Fort St.John, BC, Edmonton, AB, and Regina, SK, the hearings have returnedto the NEB’s home Calgary and are expected to grind on well intospring. Alliance had sought approval in time to start constructionthis July.

There are some signs those current realities may be about tochange, however. Alliance officials have confirmed that privatetalks have been held with Nova and TransCanada. Alliance and theCanadian Association of Petroleum Producers, a vigorous supporterof the project, are suggesting Nova now has a good reason to changestrategies – its proposed merger with TransCanada. TransCanada alsobelongs to the opposition camp in the Alliance case, but hasstopped well short of aggressive tactics used by Nova that promptedirate protests in writing by CAPP this winter.

The merger requires approval by the Alberta Energy and UtilitiesBoard. The producers and Alliance hope to prod the AEUB intodemanding assurance that there will be competition in the Canadiangas transportation sector during spring hearings.

Gordon Jaremko, Calgary

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