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TransCanada Keeps Its Mainline Promise With Open Season

TransCanada Corp. set out Friday to keep a promise to Ontario, Quebec and American exporters by maintaining full firm natural gas service while converting part of its Mainline to oil deliveries.

The Calgary-based, international pipeline launched an open season for receiving binding bids for capacity additions to the busy eastern leg of the Mainline, which has become an import freeway for Marcellus shale production from the United States (see Daily GPI, Aug. 5).

The open season will continue until Jan. 15 as a test of the market for new firm gas transportation services to compensate for partial conversion of the Mainline by TransCanada's Energy East project, a C$12-billion (US$ at par) plan for oil deliveries of 1.1 million b/d across Ontario, Quebec and the Atlantic provinces.

Rather than set a target, the open season left the new capacity open to be determined by the transportation market, enabling gas suppliers and buyers to request as much replacement and additional service as they expect to need.

In a statement announcing the invitation for bidders to make binding capacity commitments, TransCanada gas pipelines president Karl Johannson said, "This open season is an important step in identifying the scope and cost of any new capacity that may be needed."

Johannson also predicted the action will "allow TransCanada to ensure that the cost of serving our natural gas customers does not increase as a result of the Energy East conversion."

The announcement was the second launching in a week of a capacity addition open season in the eastern Canadian gas market region. Union Gas (Spectra Energy) earlier announced bids are being sought for up to one billion cubic feet per day of new service centered on the Dawn storage and trading hub in southern Ontario.

TransCanada, Union, Enbridge Gas and Gaz Metropolitain are currently fleshing out a settlement on eastern transportation services and costs that was reached in principle during summer, following a long fight over potential capacity losses and toll increases due to the proposed Energy East conversion (see Daily GPI, Sept. 23).

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