NOVA GAS TRANSMISSION FILES APPLICATION FOR LOAD-RETENTION SERVICE
WITH ALBERTA ENERGY AND UTILITIES BOARD
CALGARY, January 31 /CNW/ -- NOVA Gas Transmission Ltd., (NGT) said today
it has filed an application with the Alberta Energy and Utilities Board (EUB)
which seeks expedited consideration and approval of a load-retention service.
This load-retention service would provide shippers that had signed precedent
agreements with Palliser Pipeline Inc. with a unique, short-haul restricted
service that has comparatively fewer options and a longer average contract
term.
The filing follows an agreement reached in December 1996 between NOVA
Corporation and PanCanadian Petroleum Limited. If the application receives
regulatory approval, it will eliminate the need to build the duplicative
Palliser pipeline.
``From the beginning, we believed it was in the best interests of all
customers that Palliser not be built as planned,'' said Bob Schmidt, NGT Vice
President of Regulatory Affairs. ``NGT's application acknowledges that a
single postage-stamp rate no longer is sufficiently flexible to meet the
increasingly diverging interests of our customers, including distance of haul.
It is just the kind of industry-driven, competitive solution that Alberta's
Minister of Energy was calling for.''
The proposed load-retention service rate is 15.5 cents per thousand cubic
feet (Mcf), effective January 1998 and will escalate by two percent per year
up to 20 years. Approval of the load-retention service would raise the
existing postage-stamp rate to all other shippers on the NGT system by less
than one cent per Mcf of gas transported. Any pipeline that takes volumes off
NGT's existing system would sharply increase overall transportation costs.
The load-retention service proposal addresses a number of public-interest
benefits:
- It responds to indications by Alberta's Minister of Energy that market
forces and industry-initiated solutions should play a direct role in
transportation pricing and pipeline-capacity decision.
- It meets the desire of specified shippers for a new, long-term,
limited transportation service that is distinct from NGT's current
firm service.
- It reduces estimated 1998 capital costs for facilities by some $360
million that would otherwise be borne by producers in the Western
Canada Sedimentary Basin (NGT will accommodate Palliser volumes for
less than $5 million in incremental costs compared with proposed
Palliser capital costs of $365 million.)
- It provides an opportunity for all stakeholders, after implementation
to consider the need for a comprehensive or generic change to the
current rate design.
NGT's average unit cost for transporting natural gas has remained
relatively flat over the last decade. At the same time gas deliveries have
nearly doubled and access to ever more distant gas producing fields has been
provided. This history of efficiency gain is expected to continue in the
future.
NOVA Gas Transmission, a wholly owned subsidiary of NOVA Corporation, is
the largest-volume carrier of natural gas in North America, moving 4.4 Tcf of
gas in 1996. NGT's 13,500-mile system transports natural gas for use within
Alberta and to provincial boundary points for connection with pipelines
serving markets elsewhere in Canada and the United States. The system moves
over 18 percent of the natural gas produced annually in North America and more
than 80 percent of Canadian natural gas production.
NOVA Corporation is a worldwide natural gas services and petrochemical
company. NOVA Corporation's trading symbol on the Alberta, Toronto, Montreal
and New York exchanges is ``NVA''.
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For further information: Bob Schmidt, Vice President, Regulatory Affairs, (403) 290-7688; Paul Clark, Public Affairs, (403)
290-7603; Bill Rowe, Investor Relations, (403) 290-7807, NOVA Corporation |
