NGI The Weekly Gas Market Report
The Federal Energy Regulatory Commission voted out a conditionalcertificate at yesterday’s regular meeting for the proposed 70-milelong Horizon Pipeline to carry 380 MMcf/d from the Joliet, IL, hubinto northern Illinois.
Final certification is dependent on completing an environmentalreview and assessment. The project provides for construction of28.5 miles of 36-inch diameter pipeline and the leasing of 380MMcf/d of capacity on 42 miles of pipeline owned by Kinder Morgan’sNatural Gas Pipeline Company (NGPL). Horizon is committed to payingNGPL just over $2 million annually for the 20-year lease. Thelife-of-the-contract total of $41 million is less than half of the$90 million Horizon estimates it would cost to build the 42 milesof pipe.
The project, sponsored by NGPL and Nicor Inc., is expected tocost $75 million. Sponsors have said the line would be capable ofeconomic expansion in the future to serve markets in southernWisconsin. Nicor Gas has committed to transporting 300 MMcf/d onthe line for a 10-year term at a negotiated rate. Nicor says itneeds to the additional supplies because its customer base isgrowing at the rate of about 30,000 new customers a year.
Horizon sponsors claim the line will have little impact onlandowners because of the use of existing NGPL pipeline. Also muchof the line to be built will use an existing electric powerlineright-of-way.
Construction is expected to begin in the Spring of 2001 and becompleted by Spring 2002. Horizon is the second line in the area toget the nod from FERC. The 149-mile Guardian Pipeline, a 36-inch linethat would transport 750,000 Dth/d of gas from the Chicago Hub tomarkets in northern Illinois and southern Wisconsin, was approved inJune (see Daily GPI, June 15). Guardianwill connect with Wisconsin Gas Co’s distribution system near Ixonia,WI. Both lines are expected to aid in dispersing the 1.325 Bcf/d ofadditional western Canadian gas that is due to start flowing into theChicago Hub on the Alliance Pipeline next month.
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