Despite the recent failure of multiple pipeline expansions intonorthern Illinois and Wisconsin, CMS Energy, WICOR and Viking Gashave come up with another project they hope will finally wrest someof the marketplace from ANR Pipeline’s monopoly grip. The projectappears to have what its predecessors did not: a confirmed market.
WICOR subsidiary Wisconsin Gas, the state’s largest LDC, hassigned a long-term contract for 650 MMcf/d. “We feel the commitmentwe’ve made really makes this pipeline a very viable project,” JimSchott, senior vice president of Wisconsin Gas, said last week inan interview with NGI. “There’s a lot of growth in Wisconsin,especially in the power plant area,” he noted, citing a 1,000 MWgas-fired power plant announced last week by U.S. Generating Co.and a host of other new gas-fired power projects and plant upgradestotaling about another 1,000 MW of capacity. “Obviously it’s notall going to get built, but in any event there is going to be a lotof new gas supply needed in the state. There’s also just natural[population] growth in the state.”
The proposed $230 million Guardian Pipeline project would addbetween 750 MMcf/d and 1.1 Bcf/d of firm transportation capacity,depending on market need, to the southern Wisconsin and northernIllinois market in November 2002. It would transport gas fromproposed interconnections with major pipelines at the Chicago hubnear Joliet, IL, to northern Illinois and southeastern Wisconsin,serving new power generation and gas demand growth along the way.Guardian would require 24,000 hp of compression and 147 miles of36-inch diameter pipe extending from Joliet to Watertown, WI.Wisconsin Gas is planning to build a 35-mile service lateral toconnect the Guardian line at Watertown with its Milwaukee-areadistribution system.
“The project serves an urgent need in the region,” saidWisconsin Gas CEO Bronson Haase. “Guardian will bring competitionto the market, and along with it, will bring lower gas costs andcompetitive services to our customers and other natural gasconsumers in the region.” Wisconsin Gas estimated the line wouldsave its customers in Wisconsin alone more than $100 million duringthe pipeline’s first 10 years of operation. It would be replacingservice currently provided by ANR Pipeline.
“We’re very reliant on ANR in southeastern Wisconsin andbasically do not have pipeline competition. This brings incompetition,” said Schott. Wisconsin Gas holds about 800,000 Dth/dof peak day firm transportation and storage deliverability on ANR.Schott wouldn’t say how much of that capacity would be turned back.The amount will be determined by the success of the Guardianpipeline, he said.
ANR filed an application last week with FERC for its secondWisconsin pipeline expansion in 18 months. The $37.5 millionproject would increase capacity on ANR’s system by 200 MMcf/dthrough the addition of 21,500 hp of compression and three miles of42-inch diameter pipe.
“Phased-in expansion of the existing ANR system represents themost efficient way for Wisconsin to gain access to increasedsupplies of natural gas at ANR’s Joliet Hub via flexible andeconomical transportation and storage services,” said ANR PresidentJeffrey A. Connelly.
ANR is the only pipeline between northern Illinois and SouthernWisconsin. And its continuing growth follows the demise of severalother competing projects, including Viking Voyageur, Voyageur andIllinois-Wisconsin Express, all of which would have served southernWisconsin and northern Illinois.
Unlike some of the other projects, however, Guardian will beable to provide the same degree of flexibility as ANR because ofits access to Illinois storage behind Nicor, storage operated byNorthern Natural and Michigan storage through CMS’ proposedTriState project.
“It provides excellent synergies with our proposed TriStatepipeline from Joliet to Dawn, Ontario by linking our extensive gasstorage assets in Michigan with potential storage customers inWisconsin and Illinois,” said CMS President William J. Haener.”Guardian Pipeline will also provide additional market outlets forthe Panhandle Eastern and Trunkline Gas pipeline systems which arebeing acquired by CMS.” A binding open season for the Guardianproject will start in April.
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