The introduction of the 1.325 Bcf/d Alliance Pipeline into theNorth American gas market appears to have had less of an impact ongas flows out of western Canada than expected, according torepresentatives of TransCanada PipeLines, PG&E Gas Transmissionand Alliance. Extremely strong gas demand in the Pacific Northwest,California and in the Midwest has produced continued high loadfactors on TransCanada and PG&E GT-NW despite the presence oftheir huge new rival for Western Canadian supply.

“The contract picture changed significantly on [TransCanada]since the first of November and primarily at our Empress, AB,delivery point into the TransCanada mainline from the Alberta pipe,but actual physical gas flows [at about 6 Bcf/d] have not changedcorrespondingly,” said Klaus Exner, director of pipeline systemoperations at TransCanada. “The big picture overview that I wouldgive you is that demand is very high in the Pacific Northwest andCalifornia and we continue to run at the highest possible loadfactor down that leg of our pipeline system out of Alberta, throughBritish Columbia and into the PG&E systems. That hasn’t let upat all and we don’t foresee that letting up.”

PG&E Gas Transmission Spokeswoman Sandra McDonough saidPG&E GT-NW has been running full at 2.6 Bcf/d for some time andis delivering 900 MMcf/d to non-California load in the PacificNorthwest. “We’re turning back demand right now. Every power plantin this region is running full tilt. Tuscarora [Gas Transmission],the Nevada pipeline, is full. Our Northwest deliveries are fixed.We’re delivering as much as we can deliver right now.”

TransCanada’s other major export route out of the WesternCanadian Sedimentary Basin is the Foothills and Northern Borderroute into the Midwest. It also continues to operate at high loadfactors. “We didn’t see a huge drop-off in physical flows post Nov.1. We’ve seen the IT volumes come up considerably,” said Exner.”The one thing that has changed is the volatility of the flows.Customers are making frequent intraday nomination changes and we’reseeing more up and down and day-to-day variations, according to theweather and the markets, than we would have when we had a higherfirm contract level. The fluctuations are driven purely by theprice differential between AECO and the Dawn Hub in Ontario, whichindicates whether or not interruptible flow on the mainline is inthe money or not.”

Alliance Pipeline spokesman Jack Crawford said the system hasbeen running flat out at about 1.325 Bcf/d since the valves wereopened for commercial service Dec. 1. He also said the pipelinesoon would be testing to increase flows on the system. It has beenestimated that Alliance could increase gas flows to 1.5 Bcf/d withexisting compression. The additional capacity would be divided upamong existing shippers, Crawford said. “We haven’t cranked up thesystem above the contract capacity yet. We probably won’t do thatfor a couple weeks until we get things ironed out. Frankly though,I’m not sure Chicago is their best market right now given thepricing in the Pacific Northwest and California.”

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