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Alliance is Right on Track

Alliance is Right on Track

Alliance Pipeline, the largest initial pipeline project in North America, is on track to begin service on its scheduled date of Oct. 1, 2000, the project's CEO said last week. All of the construction goals for 1999 have been met and currently 77% of the mainline has been installed.

"I am very pleased to report that our 1999 construction program has been completed on schedule and within our overall budget," said Norm Gish, Alliance CEO. "On Monday Nov. 29, we completed an historic weld at the Saskatchewan-North Dakota border symbolically linking together the product of this year's work by almost 7,000 people on both Canadian and American crews."

More than 80% of both the Canadian and American 36-inch pipeline has been installed and the rest will be finished by the end of this coming summer, the company said. The 42-inch pipeline, however, is not as far along as less than 20% of it has been installed in both the Canada and U.S. portions. Alliance said large portions of the 42-inch pipe will be installed this winter.

The pipeline company also said construction of 21 compressor stations on both the mainline and laterals is continuing on schedule as is the Aux Sable Liquids Products site.

Construction on the project began in the fourth quarter of last year. The C$3.7 billion Alliance pipeline would ship 1.3 Bcf/d of gas to Chicago.

The addition of Alliance, along with the expected operations of Maritimes and Northeast Pipeline and the recent start of the Northern Border expansion, have led to industry-wide speculation on gas prices. Last month, Larry Larsen, a vice president at Williams Gas Pipeline-West, predicted that western prices, such as Sumas and San Juan Basin price points could be radically affected when Alliance becomes operational. Larsen projected that Alliance will help boost prices at such western points as Kingsgate, Sumas and major spot locations in the Rockies from recent levels in the $2.10s, $2.20s and $2.30s to solid base positions in the $2.70s and $2.80s by 2005 (see NGI, Nov. 15).

Some say the effects already are being felt. Canadian analysts pointed out last month that in the second quarter of 1999, Canadian exports under long-term contracts (two years or more) fetched an average US$2.12 per MMBtu, up 11 cents or 5% from the first quarter of this year. Short-term deals, which now account for 57% of Canadian exports, averaged US$1.92, up 16 cents or 9% (see NGI, Nov. 1).

John Norris

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