The 1 Bcf/d Vector Pipeline project continued moving ahead asthe most likely new Midwest pipeline project to break ground andbegin construction. Westcoast Energy decided to grab a 30% equitystake and committed to take 240 MMcf/d of firm capacity in the $500million project. The transaction gives Westcoast a major stake ineach of three new gas pipeline projects that will form a newdelivery corridor to the Midwest, Northeast and eastern Canada fromthe Western Canadian Sedimentary Basin.

“Acquisition of this interest in the Vector Pipeline completesanother piece of Westcoast’s North American footprint strategy innatural gas transmission,” said Westcoast CEO Michael E. J. Phelps.”It connects with and complements our 24% interest in AlliancePipeline. These pipelines will provide a new source of natural gasto consumers in Ontario, increase utilization of the Union Gas Dawnhub, and would serve to provide more natural gas supply for theproposed Millennium Pipeline Project from Dawn to New York, inwhich Westcoast is a participant.”

The Vector project will become the middle link in a chain fromAlberta to New York City. The other two components are the upstreamAlliance Pipeline and the downstream Millennium project. All threeare expected to be in service in fall of 2000.

Enbridge Inc., Vector’s lead sponsor, sold Westcoast the 30%stake, but will retain a 45% interest in the project and a capacitycommitment of 260 MMcf/d, while the other project partner, MCNEnergy, will hold a 25% interest with a capacity commitment of 200MMcf/d. A total of 700 MMcf/d of Vector’s capacity is now undercontract with its equity partners and another 130 MMcf/d is undercontract with third parties.

“With the entry of Westcoast into Vector, Vector is the onlyviable Chicago-to-Dawn, ON, project, and the stage is nowcompletely set for us to proceed with construction,” saidEnbridge’s Richard Bird, senior vice president of corporatedevelopment. The competing TriState Pipeline project suffered amajor regulatory setback at FERC during the summer related to apipeline lease with Consumers Energy and Vector has taken a clearlead in the race with certificates from FERC and Canada’s NationalEnergy Board.

“This transaction brings a strong partner to the project withsubstantial capacity commitments corresponding to downstreamrequirements,” Bird added. “Westcoast, Enbridge and MCN all havecomplementary strategic objectives in terms of linking the Chicagoand Dawn hubs [which is what Vector will accomplish] and utilizingstorage facilities in the region.”

Enbridge said it already has ordered all the needed compressionand pipe to build the 344-mile 42-inch diameter pipeline.Construction on some difficult river crossings is expected to beginin fourth quarter.

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