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TransCanada, Nicor See Future for Viking Voyageur

August 10, 1998
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TransCanada, Nicor See Future for Viking Voyageur

TransCanada PipeLines Ltd. and Nicor Inc. said they plan to dust off their old Viking Voyageur proposal and re-submit it as a substantially amended pipeline project, one that would be about one-seventh the length of the originally proposed project and would flow northward from the Chicago market hub to serve growing gas markets in northern Illinois and southern Wisconsin.

In a July 31st filing at FERC, the joint partners in Voyageur indicated that they were developing plans for a 140-150 mile, 1.05 Bcf/d pipeline that would begin at the Joliet/Chicago Hub area, where it would interconnect with Northern Border Pipeline and Alliance Pipeline, and would extend northward, ending just southwest of Milwaukee, WI. They plan to submit a formal application to the Commission in either September or October, said Ed Werneke, vice president of supply ventures with Nicor, parent of Nicor Gas.

The radically altered Voyageur surfaced a little over a month after the announcement of a virtually identical proposal, the Illinois Wisconsin Express. Amending the previously filed certificate presumably would give the Voyageur proposal a head start on the Express which has yet to file at FERC.

Werneke said Voyageur's plan "is to revise the application that we have at FERC currently - which would be that old Viking Voyageur concept." The original application called for construction of a 773-mile, 1.4 Bcf/d pipeline that would interconnect with TransCanada at the Manitoba border and bring gas down through Minnesota, Wisconsin and into the market hub in Chicago.

The project sponsors asked FERC last April to suspend consideration of the project, which was in head-to-head competition with the proposed Alliance Pipeline, because they were unable to obtain enough shipper commitments to justify building the entire line, Werneke

Voyageur Revitalized continued from page 1

noted. The Commission gave the sponsors until late July "to see if we could serve them [northern Illinois and southern Wisconsin] in some other way." The sponsors in the end decided to pursue the southern portion of the project (from southern Wisconsin to Joliet), but opted to forego the northern section (from the Manitoba-Minnesota border to southern Wisconsin), at least for now. They hope to build the southern section for about $260-$270 million.

But it has not ruled out building the northern section altogether. "Sometime in the future we would anticipate that that might be something we would do, but for the time being we don't believe that there is adequate support for that to be completed all the way up to the Canadian border," Werneke said.

Looking to the future, "we have been very active in designing a different type of pipeline project, but we still want to serve the same markets" that were planned in the original project - northern Illinois and southern Wisconsin, Werneke said. "Those are very strong markets. They're experiencing a lot of growth. They're experiencing a lot of interest in electric power generation. And, of course, in Wisconsin currently the utilities there are pretty much captive to one pipeline," ANR Pipeline. He believes Viking Voyageur, if approved and built, would provide targeted customers with an alternative to ANR.

"We've been working very closely with the LDCs in both states. We've had strong support at a conceptual level right now from them," he noted. Some of the LDCs include Nicor's own utility subsidiary Nicor Gas in Illinois, and Wisconsin Gas, Wisconsin Electric Power and Madison Gas and Electric. The sponsors told FERC that they are "actively negotiating" with these LDCs, and intend to hold an open season during the middle of August. Werneke declined to say whether any shippers have committed to the project yet. "I'm really not at liberty to talk about the level of commitments we have right now."

The competing Illinois Wisconsin Express Project is sponsored by a coalition of El Paso Energy, Enron, Peoples Energy and Northern Border Pipeline. They have plans to build a $220-$280 million pipeline that also would extend from Joliet, IL, north to just north of Milwaukee. The project would have an initial design capacity of 650 MMcf/d. Moreover, ANR and Viking Gas Transmission have announced plans to expand their existing transportation systems to capture the incremental growth in the region.

"I really don't view it [the Express Project] as serious competition personally. I think that our project is much better defined," Werneke said. Given that Viking Voyageur already has a proposal on file at the Commission, "we believe that positions us to have a competitive edge."

He thinks the new Viking Voyageur project will fare well at FERC. "I think FERC has demonstrated an interest in seeing competition among the interstate pipelines. And this would certainly go a long way to providing competition in Wisconsin, which they don't have much of right now." He said the sponsors plan to propose an in-service target date of November 2000 for the project.

Susan Parker

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