The first fruit has fallen from the new Canadian tree ofcompetition among natural gas transporters, as TransCanadaPipeLines prepares to auction spare capacity that is developing onits system.

There will be a series of “open seasons.” The procedure,approved by shipper representatives on a standing TransCanada tollstask force, and stamped by the National Energy Board, will givehighest priority in the initial auction to bids by companiesalready in a queue for TransCanada service. The NEB, whichencourages business settlements, described the open seasons as afair and responsible way to dispose of excess capacity withoutelaborate regulatory proceedings. The approval runs until Nov. 1,2000, or an undetermined earlier date if TransCanada steps forwardsoon with promised proposals to adapt to competitive capacitymarkets.

TransCanada has told the NEB that its mainline has lost 580MMcf/d in traffic as of Nov. 1 due to non-renewals of contracts.Also watch for developments on TransCanada’s Nova gas-gatheringgrid in Alberta unless trends reverse themselves. As of Nov. 1, 362MMcf/d of traffic is dropping off the Nova grid due to contractnon-renewals.

The TransCanada auction marks the beginning of a shuffle inCanadian pipeline use that is expected to be long. AlliancePipeline Project’s route to Chicago – now under construction withan in-service target of the fall of 2000 as a 1.3-Bcf/d bypass ofNova and TransCanada – is only one factor.

The expansion-extension of the Foothills-Northern Border exportsystem from western Canada to Chicago already has had an effect. Agas survey by the Canadian Department of Natural Resources recentlyreported that shippers filled up the 690 MMcf/d in new facilitieswithin a month when they went into service last winter. TotalCanadian export capacity, also counting a modest expansioncompleted by TransCanada, rose to 10.2 Bcf/d by year-end 1998 – a986 MMcf/d, or 11% increase. By year-end 2000, counting twoprojects now under construction – Maritimes & NortheastPipeline, as well as Alliance – Canadian export capacity isprojected to grow by another 12% to 12 Bcf/d.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.