PG&E Gas Transmission Plans to Add 200 MDth/d

Soaring California gas prices and rapidly rising gas demand mainly for power generation the Pacific Northwest and California has prompted an expansion of the PG&E Gas Transmission Northwest (GTN) system. The pipeline said last week it plans to file with FERC in April for a small initial expansion project for next year but potentially could add 1 Bcf/d of capacity over the next decade.

In addition, upstream transporters TransCanada PipeLines and Nova Gas Transmsission also said last week they are looking into expanding their British Columbia and Alberta systems to match PG&E's efforts downstream. They have requested correspondance with all of their shippers to estimate their future needs and determine how much capacity should be added.

The GTN project would add 200 MDth/d of firm transportation capacity to its mainline although a recent open season attracted 25 bids, totaling 2,138 MDth/d of capacity. GTN said 200 MDth/d was the maximum it could do under the circumstances and under its existing 26-cent maximum rate for FT.

"Our effort is going to be on getting this expansion on line as quickly as we can," said GTN spokeswoman Sandra McDonough. "We've already done a lot of the environmental work as part of a proposed expansion a couple years ago. Plus we can do this without any downstream expansion and we can do it at our existing rate. We're trying to get it online before the summer of 2002."

Much of the new capacity, which will be added to GTN's mainline between Kingsgate, BC, and Malin, OR, is expected to serve new electric generation plants in the region. The pipeline project is expected to be in service in June 2002. It will require the addition of 21 miles of 42-inch diameter looping north of Spokane, WA, as well as additional compression at five existing stations.

Peter Lund, vice president for PG&E's National Energy Group, parent company of GTN, said the plan is to move forward with this expansion quickly and "consider our options to do further capacity additions in the years ahead."

"What we've talked about is expanding the system as much as 1 Bcf/d over the next decade, depending on where the market is," said McDonough. "We'll move forward on this expansion, see how it works and then at the right time probably go back to the market again for the next increment."

The GTN system has been operating near 100% capacity. Its entire capacity is fully subscribed with an average contract term expiring in 2013. The 1,335-mile system has a capacity to transport 2,700 MDth/d of gas from Canada, making it the largest U.S. transporter of Canadian natural gas.

GTN's plan caught the eye of TransCanada, which told shippers on its Nova system in Alberta and its BC System in British Columbia that it would undertake a capacity rationalization program that would go into effect starting in November 2002. Results of discussions with its shippers will determine whether an expansion is necessary, the company said.

Rocco Canonica

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