Great Lakes Gas Transmission filed a large but downsized versionof its original 1999-2000 expansion project with FERC last Fridayon behalf of a single shipper, TransCanada PipeLines. The projectis expected to cost $620 million and begin operating in November2000. The Great Lakes 300 Expansion will involve the addition of260 miles of 36-inch diameter pipeline loops, including a newunderwater crossing of the Straits of Mackinac, and seven newcompressors adding 180,000 hp of compression. Great Lakes’ systemcurrently transports about 2 Bcf/d of Canadian gas from Emerson,MB, through Minnesota, Wisconsin and Michigan.

Early last year, TransCanada had expected to foot the bill formost of a 2 Bcf/d expansion of the Great Lakes system as the majorcomponent of the Canadian pipeline’s larger Nexus project, whichwas designed to move more Canadian gas to eastern U.S. markets. Butthose plans were put on hold because of competition from a numberother expanding pipelines.

A December 1997 open season for interest in new firm capacityalong Great Lakes entire 1000-mile Emerson, MB-to-St. Clair, MI,system attracted only a bid from TransCanada. No current shipperscame forward to permanently release existing capacity, accordingJohn Wallbillich, vice president and general counsel. TheDetroit-based pipeline company is taking the safe route with itsrate design. The pipeline is seeking authorization to chargeTransCanada an incremental 100% load factor reservation andutilization rate of 78.5 cents/Dth – more than twice the currentrate of 35 cents/Dth – for 15 years. Great Lakes said existingshippers will receive significant benefits from the expansion,including additional reliability from the new compression and extraflexibility from the 650 MDth of linepack associated with thepipeline looping. But it’s not willing to risk another lengthybattle with FERC by filing to roll the cost of the project intoexisting rates. If project costs were rolled in, existing rateswould increase by more than the 5% threshold set by the Commission,Great Lakes said.

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