NGI The Weekly Gas Market Report / NGI All News Access

Alliance Pipeline Delay Extended

Alliance Pipeline Delay Extended

In a move that is likely to send ripples through the market, particularly around Chicago, the 1.325 Bcf/d Alliance Pipeline extended its commercial in-service delay last week to Nov. 13 from Oct. 30. Pipeline officials said moisture and debris in the line caused the delay.

"As we have increased the flow of test gas volumes during our system commissioning, we have encountered moisture and debris from construction," said CEO Norm Gish. "Specifically, most of the debris is in the form of small pieces of foam from the [smart] pigs that were used to remove the hydrostatic testing water from the line. The problem forced us to shut down the system for short periods of time to clean out accumulated debris.

"We have since designed and installed additional in-line screens at our compressor stations. The situation is improving and we are removing ever-decreasing amounts of debris with increased flows of test gas. However, this situation has not permitted us to run our system with the significant volumes necessary to adequately test the reliability of our compressors."

It is the second time Alliance has had to delay its in-service date. In early September, Alliance officials said rain in Saskatchewan this summer, directional drilling problems at a creek in British Columbia, complex connection problems with the Aux Sable liquids plant in Illinois and connection delays with several U.S. pipelines and LDCs was to blame for a one-month delay to Oct. 30 (see NGI, Sept. 11).

The pipeline will continue increasing test volumes until it does begin commercial service, said Gish. There currently is about 500 MMcf/d of test gas in the line. He expects firm delivery capacity to reach the full 1.325 Bcf/d prior to Nov. 13.

Alliance officials also noted that this is the first time a pipeline the size of Alliance has been brought on stream at one time.

Regardless of the challenge, however, market participants were expecting the system to be delivering gas starting at the beginning of the month of November and this delay is likely to have a significant impact on November bidweek trading.

One Chicago trader said he had a strong suspicion something was fishy when his index offers were lifted Friday afternoon by a marketing company, which he knows to own capacity on the pipe. "Everyone was a buyer of index gas today for November, especially those now short for the first 13 days. I sold mine at NGI plus 1.5, but had I known that Alliance was delayed I would have held out for something a little better."

Basis, meanwhile, was pretty much unchanged at +13 to +14 for November. "It takes a lot to move the Chicago basis," he said.

Rocco Canonica, Dexter Steis

©Copyright 2000 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus