Backers of Alliance Pipeline Project are going out on a bigfinancial limb by spending heavily to advance the proposed newCanadian export route to Chicago while still awaiting approval fromthe National Energy Board. Alliance president Dennis Cornelsonreported the international consortium of pipelines and producershas spent about C$200 million (US$145 million) to date. But to keepthe project moving quickly enough to fulfill its schedule, thegroup “will have to double that by the time regulatory approvalsare obtained.”

Cornelson added “this will represent one-third of the totalrequired equity.” The C$4 billion (US$2.9 billion) project is beingfinanced 30% with equity and 70% with debt under an arrangementrecently concluded with a banking syndicate. While gas producershold two-thirds of Alliance’s initial capacity of 1.3 Bcf/d, aseries of sponsorship shuffles have put 75% of the ownership in thehands of pipelines. They include IPL Energy, Westcoast Energy,Coastal Corp., Duke Energy, Mapco and the transmission arm of theUnocal family.

An April settlement, between warring Canadian pipeline andproducer factions on new rules for civility in competition, speededup the hearings, which ended May 20, but not enough to retrieveAlliance’s lost time. The pipeline still will be delayed by oneyear until November 2000.

Alliance currently predicts all the regulatory paperwork will bedone on both sides of the international border before the end ofthis year, including final formal “facilities releases.” Pipeproduction began this month and will continue through the spring of2000, racking up big bills through the regulatory waiting period.The schedule calls for a winter start on lateral feeder lines,right-of-way clearing and river crossings and mainline constructionnext spring.

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