TransCanada and National Fuel to pursue gas pipeline development

Sep 05, 2001 02:00 AM

TransCanada PipeLines Limited and National Fuel Gas Company announced that the companies have been working together to evaluate the feasibility of developing a new natural gas pipeline project to provide transportation service from Dawn, Ontario to the Ellisburg-Leidy area in Pennsylvania. After examining the results from initial technical, environmental and market assessments in Canada and the United States, the companies have decided to pursue commercial development of this project.
The project, called Northwinds Pipeline, will be designed to bring new natural gas supplies to growing markets along the East Coast via a 215-mile (346 km), 30-inch natural gas pipeline that will originate in Kirkwall, Ontario, cross into the United States near Buffalo, New York and follow a southerly route to its destination in the Ellisburg-Leidy area in Pennsylvania. The initial capacity of the pipeline will be approximately 500 mm cfpd of natural gas and the preliminary cost of the pipeline is estimated to be between $ 350 to $ 400 mm.

The pipeline route, although not yet finalized, will utilize existing utility corridors and rights-of-way to the greatest extent possible in an effort to mitigate effects of the construction activity. It is expected that the project design will also include construction of a tunnel to achieve the border crossing from Canada into the United States.
"The Northwinds Pipeline is uniquely positioned to be a part of a solution for long term energy security by building upon existing energy infrastructures and bringing new, low cost natural gas supplies to growing markets on the East Coast.
National Fuel's participation in this project is a strategic and logical fit. Our existing systems are located at the Canada/United States border and provide the path for new gas supplies to reach markets in western New York, north-western Pennsylvania and beyond," said Bernard J. Kennedy, Chairman and CEO, National Fuel. Northwinds Pipeline will allow markets in the United States to take advantage of the growing natural gas supply available at the natural gas market hub located in Dawn, Ontario.

Presently, more than 3.5 bn cfpd of pipeline capacity and over 870 bn cf of storage capacity are fed into that regional hub. Northwinds, through interconnections along the pipeline route and in the Ellisburg-Leidy area (a major natural gas market hub for the East Coast), will have access to over 5 bn cf of transportation pipeline capacity on interstate pipeline systems that supply all major East Coast markets. TransCanada and National Fuel anticipate issuing a public offering or open season for transportation service on the pipeline this autumn.

Contingent upon the results of this offering, the companies would file applications with the Federal Energy Regulatory Commission (FERC) later this year and with the National Energy Board (NEB) in the spring of 2002 to seek approval to build this international natural gas pipeline line.
"Northwinds Pipeline is tailored to meet the needs of the mid-Atlantic and New England markets, which are among the fastest growing markets on the continent," said Hal Kvisle, TransCanada's CEO. "This project will strongly enhance TransCanada's existing and proposed natural gas transportation systems, from the Western Canada Sedimentary Basin to eastern Canada to the north-eastern United States."
Construction of the Northwinds Pipeline is estimated to take approximately 16 to 20 months. The targeted in-service date for this pipeline is late 2004, but will be more precisely determined once the necessary applications are submitted to the United States and Canadian regulatory authorities and the review and approval process is underway.

TransCanada is a leading North American energy company. It is focused on natural gas transmission and power services with employees who are expert in these businesses. The company's network of approximately 38,000 km of pipeline transports the majority of western Canada's natural gas production to the fastest growing markets in Canada and the United States.
TransCanada owns, controls or is developing a total of approximately 1,900 MW of power. An equal amount of power can meet the needs of nearly 2 mm average households.

Source: National Fuel Gas Company and TransCanada PipeLines Limited
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