Despite the recent failure of multiple major pipeline expansionprojects to Wisconsin, CMS Energy, WICOR and Viking GasTransmission have come up with another one that they believe haswhat it needs to succeed, namely a signed long-term contract withWICOR subsidiary Wisconsin Gas, the state’s largest LDC, for 650MMcf/d.

“We feel the commitment we’ve made really makes this pipeline avery viable project,” said Jim Schott, senior vice president ofWisconsin Gas. “There’s a lot of growth in Wisconsin, especially inthe power plant area,” Schott noted, citing a 1,000 MW gas-firedpower plant announced yesterday by U.S. Generating Co. Hecalculated more than 2,000 MW of gas-fired power generation hasbeen planned. “Obviously it’s not all going to get built, but inany event there is going to be a lot of new gas supply needed inthe state. There’s also just natural [gas demand] growth in thestate.”

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 onANR in southeastern Wisconsin and basically do not have pipelinecompetition. This brings in competition,” said Schott. WisconsinGas holds about 800,000 Dth/d of peak day firm transportation andstorage deliverability on ANR. Schott wouldn’t say how much of thecapacity would be turned back. The amount will be determined by thesuccess of the Guardian pipeline, he said.

Earlier this week ANR filed an application with FERC for itssecond Wisconsin pipeline expansion in 18 months. The $37.5 millionproject would add about 200 MMcf/d of capacity to ANR’s existingsystem. Construction of ANR’s most recent expansion is expected tobegin this spring.

ANR has been the only company to successfully expand into thestate. Its project followed the demise Viking Voyageur, Voyageur,and the Illinois-Wisconsin Express projects, the latter two ofwhich were designed to provide takeaway capacity from the Chicagohub to southern Wisconsin.

Schott said Guardian will be able to provide the same degree offlexibility as ANR because of its access to Illinois storage behindNicor, storage operated by Northern Natural and Michigan storagethrough CMS’ proposed TriState 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.

©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.