The major accord signed by Canadian gas industry stakeholders lastweek that virtually assures construction of the Alliance Pipelineproject (See GPI Daily, April 9) hasmade the fate of the competing 1.4 Bcf/d Viking Voyageur projectextremely doubtful. Voyageur sponsors TransCanada PipeLines andNorthern States Power were in meetings all day Monday and Tuesday andan announcement is expected later this week. One Voyageur officialsaid all options are possible, including shelving the 800-milepipeline project.
The project was designed as an alternative to the Allianceproject that followed a different route, paralleling the existingViking Gas Transmission system from Emerson, MB, through Minnesotaand Wisconsin and extending Viking to the Chicago hub.
“We have become aware that it might have hit some realproblems,” said Mark T. Maranger, CEO of Wisconsin Fuel and Lightand leader of a coalition of Wisconsin gas distributors supportingthe project. “The [Canadian] agreement is one of them, but we’renot certain that the support of the people that have to sign the[shipper agreements] is strong enough to keep the project viable.”
Sponsors already had filed a request with FERC to place theproject at risk for the first 10 years of operation because ofinadequate capacity subscriptions – 925,000 MMBtu/d, or 66% oftotal capacity. “My understanding was that that was done in orderto keep the regulatory process in motion but even the ownersweren’t willing to risk a third of the project being empty. So eventhough FERC may not require it, once the project was built I thinkthe owners would require substantially the same thing.”
The Viking official said potential shippers still are havingdifficulty finding Canadian supply to flow on the line. Canadianproducers may even have difficulty filling the 750 MMcf/d NorthernBorder expansion this year, he said, let alone the on-goingTransCanada expansions and the 1.3 Bcf/d Alliance, and 1.4 Bcf/dVoyageur.
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