TransCanada PipeLines Ltd. and Nicor Inc. said they plan to dustoff their old Viking Voyageur proposal and re-submit it as asubstantially amended pipeline project, one that would be aboutone-seventh the length of the originally proposed project and flownorth instead of south. The revised project would originate at theChicago market hub and deliver to growing gas markets in northernIllinois and southern Wisconsin.

In a July 31st filing at FERC, the joint partners in Voyageurindicated they were developing a 140-150 mile, 1.05 Bcf/d pipelinethat would begin at the Joliet/Chicago Hub area, where it would betaking gas from Northern Border and Alliance pipelines, and delivering it along a route ending just southwest of Milwaukee, WI.They plan to submit a formal application to the Commission ineither September or October, said Ed Werneke, vice president ofsupply ventures with Nicor, parent of Northern Illinois Gas.

“Our plan is to revise the application that we have at FERCcurrently – which would be that old Viking Voyageur concept,” hetold NGI. The original application called for construction of a773-mile, 1.4 Bcf/d pipeline that would interconnect withTransCanada at the Manitoba border and bring gas south throughMinnesota, Wisconsin and into the market hub in Chicago.

The project sponsors asked FERC last April to suspendconsideration of the project, which was in head-to-head competitionwith the proposed Alliance Pipeline, because they were unable toobtain enough shipper commitments to justify building the entireline, Werneke noted. The Commission gave the sponsors until lateJuly “to see if we could serve them [northern Illinois and southernWisconsin] in some other way.” The sponsors in the end decided topursue the southern portion of the project (from southern Wisconsinto Joliet), but opted to forego the northern section (from theManitoba-Minnesota border to southern Wisconsin), at least for now.

But it has not ruled out building the northern sectionaltogether. “Sometime in the future we would anticipate that thatmight be something we would do, but for the time being we don’tbelieve that there is adequate support for that to be completed allthe way up to the Canadian border,” Werneke said.

Looking to the future, “we have been very active in designing adifferent type of pipeline project, but we still want to serve thesame markets” that were planned in the original project – northernIllinois and southern Wisconsin, Werneke said. “Those are verystrong markets. They’re experiencing a lot of growth. They’reexperiencing a lot of interest in electric power generation. And,of course, in Wisconsin currently the utilities there are prettymuch captive to one pipeline,” ANR Pipeline. He believes VikingVoyageur, if approved and built, would provide targeted customerswith an alternative to ANR.

“We’ve been working very closely with the LDCs in both states.We’ve had strong support at a conceptual level right now fromthem,” he noted. Some of the LDCs include Nicor Gas in Illinois,and Wisconsin Gas, Wisconsin Electric Power and Madison Gas andElectric.

The downsized Viking Voyageur project could face competitionfrom the Illinois Wisconsin Express Project that recently wasannounced by a coalition of El Paso Energy, Enron, Peoples Energyand Northern Border Pipeline. They have plans to build a $220-$280million pipeline that also would extend from Joliet, IL, north tojust north of Milwaukee. The project would have an initial designcapacity of 650 MMcf/d. Andrew N. Greene, a Washington for Viking Voyageur, conceded that the two projects weresimilar. Moreover, ANR and Viking Gas Transmission have announcedplans to expand their existing transportation systems to capturethe incremental growth in the region.

Nevertheless, Werneke thinks the new Viking Voyageur projectwill fare well at FERC. “I think FERC has demonstrated an interestin seeing competition among the interstate pipelines. And thiswould certainly go a long way to providing competition inWisconsin, which they don’t have much of right now.” He said thesponsors plan to propose an in-service target date of November 2000for the project.

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