TransCanada: Dempster Lateral a dead issue

Responses to FERC queries on open season plan include information on Canadian pipeline open season

Kristen Nelson

Petroleum News

The Federal Energy Regulatory Commission had just a few questions for TransCanada Alaska on its Alaska Pipeline Project open season plan, two of them concerning the meaning of “agrees” in the precedent agreement.

On more general issues, FERC asked about the process for capacity allocation on the Canadian pipeline and about potential impacts of any Dempster Lateral project on shippers in the proposed Canadian section of the project.

On the process for capacity allocation in the project’s Canadian line, TransCanada said: “The Canadian open season process will be conducted in a manner similar to, and consistent with, the U.S. process,” running from April 30 through to July 30, and with “the same schedule, deadlines and requirements as the U.S. open season.”

Canadian precedent agreements and the Canadian tariff “will be aligned with the comparable U.S. documents where possible,” TransCanada said.

The company said the coordinated open season process would allow potential shippers interested in transportation to Alberta to nominate capacity on the Canadian portion of the line.

“Capacity will be allocated on the Canadian Pipeline using the same process utilized in the U.S.,” TransCanada said.

FERC’s open season process for the Alaska portion of the gas pipeline requires public disclosure of the open season plan, but this is not the case in Canada.

TransCanada said “Canadian open season documents will be made available to potential shippers on a confidential basis,” while open season marketing material and certain non-confidential literature will be provided to interested parties.

TransCanada also said data rooms being set up for the open season in the U.S. and Canada will contain detailed information on both the U.S. and Canadian portions of the project.

The company said the contacts for the Canadian open season are the same as those shown on the Jan. 29 proposed open season notice for the Alaska Pipeline Project.

Dempster Lateral

TransCanada said the Dempster Lateral was proposed by the National Energy Board in its 1977 reasons for decisions for recommending certification of the Foothills Pipe Lines (Yukon) Ltd. project for moving Alaska gas through Canada.

The Dempster Lateral was proposed as a way of combining volumes of Alaska and Mackenzie Valley gas, and if certificated the Dempster Lateral would connect Mackenzie gas to the proposed Alaska line near Whitehorse, Yukon.

TransCanada said there “was insufficient evidence of the need for the Dempster Lateral” in 1977, and, unlike other zones of the Canadian Pipeline “deemed to have been certified pursuant to Section 21 of the Northern Pipeline Act in accordance with the NEB Reasons for Decision, the Dempster Lateral zone was not deemed to have been certificated” and “was specifically excluded” from certification.

“This distinction is important,” TransCanada said. “The need for the Dempster Lateral has yet to be established.”

Based on recommendations in the 1977 reasons for decisions, TransCanada said, Foothills, the Alberta Gas Trunk Line and the Canadian government entered into the 1978 Dempster Link Agreement, which “created an obligation upon Foothills to apply to the NEB for a certificate to construct and operate the Dempster Lateral.”

Foothills made that application, TransCanada said, but there was no support for proceeding with the application and “the application eventually lapsed, without any decision or recommendation being made by the National Energy Board.”

“The Dempster Link Agreement expired in 2005,” TransCanada said. “Foothills has no further outstanding obligations or liabilities with respect to pursuing a Dempster Lateral.”

Foothills is a subsidiary of TransCanada and is the entity which will build the Canadian portion of the project.