OT:Canadian firm wants to build a natural gasGo CLL Go $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Monday, Aug 06, 2007
Canadian firm wants to build a natural gas pipeline in Oregon
PORTLAND, ORE. (CP) - TransCanada Corp. (TSX:TRP) is joining with Northwest Natural Gas Company on a proposal to build a natural gas pipeline in Oregon that could cost the companies up to US$700 million.
The two companies announced Monday they'll form a new venture, Palomar Gas Transmission LLC, to design, construct, and own the Palomar pipeline to serve residential and industrial customers in the state. A separate line could also be built to link up with a proposed new liquefied natural gas plant also proposed for the Pacific Northwest region..
The main pipeline would extend approximately 354 kilometres from northwestern Oregon to north-central Oregon and would serve growing markets in Oregon, the Pacific Northwest, and the western U.S., the companies said in a release.
If approved, the new transmission line is scheduled to begin service in late 2011. The two lines would have a pricetag of between $US600 million to US$700 million if both are built.
The project continues the rapid expansion of infrastructure by major Canadian energy companies to transport Canadian oil and natural gas to energy-hungry American consumers as production from the northern Alberta oilsands is slated to rise sharply over the next decade.
In June, Calgary-based oil shipper Enbridge Inc. (TSX:ENB) and U.S. giant ExxonMobil Pipelines Co. said they were looking to build a pipeline to ship Canadian oilsands crude from Illinois to Texas.
Recently, TransCanada announced plans to expand its proposed Keystone pipeline from Illinois to Cushing, Okla., and increase Keystone's transportation capacity to 590,000 barrels a day. Other Canadian companies also have plans to build more oil and gas pipelines in Canada to transport energy to Canadian and U.S. markets.
The Palomar pipeline would connect TransCanada's existing Gas Transmission Northwest, or GTN, system in central Oregon with NW Natural's (NYSE:NWN) distribution system near Molalla, Oregon, approximately 49 kilometres southeast of Portland. TransCanada's GTN unit, based in Portland, will operate the the proposed pipeline
Palomar will request preliminary environmental approval for the project from the U.S. Federal Energy Regulatory Commission, the pipeline's principal regulator..
NW Natural's utility unit has agreed to buy about 100 million cubic feet per day of capacity on the pipeline.
"NW Natural currently depends on a single interstate pipeline for its supply, approximately two-thirds of which comes through the Columbia Gorge,"" said Gregg Kantor, president and chief operating officer of NW Natural. "The Palomar pipeline would significantly diversify our delivery options and enhance reliability for NW Natural's customers."
Under the deal, NorthernStar LLC, developer of the proposed Bradwood Landing LNG project, may elect to take capacity on Palomar should the Bradwood Landing terminal and the Palomar pipeline be built..
"This project is being designed so that, if an LNG terminal is constructed on the Columbia River, the Palomar pipeline can be extended to serve it," Kantor said.
NW Natural has about 641,000 residential, business, and industrial customers in Oregon and southwest Washington.
TransCanada, based in Calgary, has a network of more than 58,739 kilometres of pipeline that taps into virtually all major gas supply basins in North America. The company also is a major storer of natural gas and a growing independent electricity generator.