Enron Mail

From:lorna.brennan@enron.com
To:julie.mccoy@enron.com, steve.klimesh@enron.com, gary.sova@enron.com,rob.wilson@enron.com, lon.stanton@enron.com, david.marye@enron.com, courtney.barker@enron.com, sarabeth.smith@enron.com, keith.petersen@enron.com, michele.winckowski@enron.com, donn
Subject:Alliance Update
Cc:
Bcc:
Date:Fri, 10 Nov 2000 02:32:00 -0800 (PST)

Note: Alliance says they are flowing 40-50% of capacity at this time
(400-500 MMBtu/d
hitting the Chicago market). It sounds like they have not yet been able to
commission the
Aux Sable plant because of the trash gas they are still pushing through.
Some predictors
are saying the delay may get longer.

Alliance Service Delay Extended to End of November

Alliance Pipeline conceded yesterday that its commercial in-service date will
have to be delayed for the third time, this time until the end of November,
because of continued problems with debris in the pipe and trouble getting the
enormously complex components of the system working in sync. The 1,900-mile
project originally was supposed to be in service Oct. 1.

"Normal commissioning activities are continuing and most of the debris has
been removed from the line," says Alliance CEO Norm Gish. "However, periodic
reductions in the flow of test gas due to the debris have complicated the
required integration with concurrent commissioning activities at the Aux
Sable Liquid Products processing facility near Chicago." A spokesman said the
debris included "bits of foam" that came off equipment used to extract
moisture following hydrostatic testing.

The complexity of the Alliance Pipeline operations also has led some
observers to predict a lengthy delay before commercial service. The pipeline
has an immensely complicated system patented by Alliance engineers that is
designed to transport gas liquids in a gas phase with the 1.325 Bcf/d of
natural gas from British Columbia and northern Alberta through 1,900 miles of
pipe to the Aux Sable liquids extraction plant near Chicago. The pipeline
also incorporates a cutting edge electronic control system designed to allow
the pipeline to be operated by a single pilot in a downtown Calgary control
room. Alliance operators say they are actually operating three pipelines: a
physical pipe, a paper pipe and an e-pipe, which brings all aspects of the
operation together around the clock 365 days a year. "It's a tremendously
complicated system and all the parts are interdependent, for it to work, they
all have to work together."

Regardless of the delay, however, Alliance already is flowing a large amount
of gas into the Chicago market. "At this point in our commissioning
activities, the system is flowing at approximately 40 to 50% of capacity. We
expect to continue increasing the volume of test gas and approaching our firm
delivery capacity of 37.5 million cubic meters (1.325 Bcf) per day prior to
the end of November."


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