Calgary 鈥� The Alliance Pipeline, which transports natural gas from northeastern British Columbia as well as western Alberta and northwestern North Dakota, is undergoing a change in its business organization. It also announced an open season, which, if successful, would result in a 25 per cent expansion of the pipeline鈥檚 capacity.
The 3,848-kilometre long, 36-inch Alliance Pipeline passes through Saskatchewan. It crosses our borders near Kerrobert in the west and Gainsborough in the south, but does not transport Saskatchewan gas.
The pipeline was originally founded by several oil and gas and pipeline companies, but in the lead up to its construction in 1999-2000, its ownership base eventually consolidated down from a diverse ownership base, an 鈥渁lliance,鈥� as it were, to Enbridge and Pembina Pipeline Corp.
Now, after 18 years in operation, those companies are shaking up Alliance somewhat, with an announcement on March 27 of a new operating model.
In a press release of that day, Alliance said, 鈥淎lliance Pipeline Ltd. today announced that Enbridge Income Fund and Pembina Pipeline Corporation, each of which owns either directly or through affiliates, 50 per cent of Alliance, have decided to convert the operation and administration of Alliance Pipeline into an owner-operator model.
鈥淧embina and Enbridge have been working together to develop a business structure for Alliance that allows the business to safely and efficiently deliver value to all stakeholders. Upon implementation of the new operating model, Alliance's functions will be split between Enbridge and Pembina.
鈥淭he implementation of this new model is expected to be completed during summer 2018.鈥�
Inquiries to Alliance were deferred to Enbridge and Pembina.
Suzanne Wilton, senior advisor, media relations, with Enbridge, explained the new business structure allows both businesses to continue to operate the pipeline. It鈥檚 a strategic alignment, she said.
鈥淎lliance鈥檚 functions will be split,鈥� she said. Enbridge will manage the pipeline鈥檚 operations, while Pembina will be responsible for commercial and finance functions.
To that end, on March 28, Pembina announced an open season on the Alliance Pipeline for expansion capacity commitments. The open season is for an estimated 400 million cubic feet per day of additional firm service, commencing at an anticipated in-service date in the fourth quarter of 2021. The two-month open season begins聽March 28, 2018聽and closes聽May 30, 2018.
When the pipeline was initially built, it was planned with the capacity for this sort of expansion at a later date, through the addition of additional compression along the line. When the pipeline was first announced, there were allowances to add additional compressor stations between the existing ones, allowing it to increase its capacity without adding new pipe. In Saskatchewan, that would mean new compressor stations at Rosetown, Chamberlain and Creelman, on land the pipeline already owns. Additional work will also take place at existing compressor stations at Kerrobert, Loreburn, Estlin (near Regina) and Alameda.
Alliance聽receives natural gas in聽British Columbia,聽Alberta聽and聽North Dakota聽and carries it to the聽Chicago聽market, delivering approximately 1.6 billion cubic feet of natural gas per day. Pending regulatory approval,聽Alliance聽will increase capacity by approximately 25 per cent through the addition of compression and other facilities to its system. The planned in-service date is November 2021.
The offer is available to both existing and prospective shippers, for a minimum bid term of 15 years. Two open seasons are 小蓝视频 held concurrently, one for Canadian receipt and delivery services and one for聽United States聽 transportation service. Parties interested in acquiring capacity from the Canadian receipt points must participate in both open seasons to obtain delivery service to聽Chicago.
Subject to the results of the open season, this approximately聽$2 billion聽project will be backstopped by long term, take-or-pay contracts that will provide customers with long term, firm receipt service with the certainty of fixed fees.
鈥淭he proposed expansion of Alliance Pipeline will increase access to premium markets and improve our service offering to current and potential customers,鈥� said聽Jason Wiun,聽Pembina's senior vice president and chief operating officer, pipelines. 鈥淲hile our extensive discussions regarding the expansion have indicated strong shipper interest, a successful open season process is a crucial step towards advancing the project, and providing our customers with additional service and access to the premium聽Chicago聽market.鈥�
