IN THE NEWS / Natural Gas Flows South
Northern Border Pipeline begins tapping into
American mid-west
By Todd Nogier - Calgary Sun
Taps on the Northern Border Pipeline were cranked open
today transporting Canadian natural gas to the energy-hungry
American mid-west.
The much-anticipated $873-million expansion connecting
Saskatchewan and Chicago will start delivering gas today --
something cash-strapped petroleum producers and major
investor TransCanada Pipelines Ltd. have been waiting for.
"We're an investor in Northern Border and it's the first one to
Chicago so I think we feel good about that," said Gary Davis,
spokesman for TransCanada, a 30% owner in the project.
With oil prices at 12-year lows and no end in sight, players in the
Canadian oilpatch have invested a lot of money and hope into
natural gas.
For years, natural gas prices in Alberta sagged lower than prices
in the U.S. because of a bottleneck of pipeline capacity at the
border.
Higher demand south of the border and a glut of gas in Alberta
was seen as a huge opportunity for the industry and cashing in is
the 1,950-km Northern Border.
But don't expect natural gas prices to surge today with the new
capacity, say experts.
"To the extent that prices will rise with Northern Border, that has
already happened," said Rick Roberge, senior vice-president of
energy corporate finance for Price Waterhouse Coopers in
Calgary.
"The market has anticipated this expansion for months and so it is
already built in," he said.
The biggest factor now in pushing the price up further is colder
weather.
Northern Border has a capacity to transport 2.37 billion cubic
feet per day.
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