vector announces a one - month delay until december 1 note : the market reaction is interesting . one can surmise that quite a bit
of the gas that was contracted for on vector is
firm utility gas . the run up in chicago may be temporary until alternate
arrangements are completed .
vector delay confirms market ' s suspicions
future shippers on the new chicago - to - dawn vector pipeline had their fears
confirmed tuesday when pipeline officials announced that the start - up date
for the project , which was scheduled for nov . 1 to coincide with the start - up
of the long - awaited alliance pipeline , would be delayed until dec . 1 .
vector officials blamed the delay on the excessive rainfall that has hampered
construction of the pipeline , which - - - when completed - - - would provide
initial takeaway for about 700 mmcf / d of the 1 . 3 bcf / d of western canadian
gas that will be shipped to the chicago market by alliance . alliance is due
to begin operations on oct . 31 .
the announcement yesterday left many in the market asking the million - dollar
question : " where will that [ alliance ] gas go ? " in the meantime . alliance
officials noted the line has connections with existing pipelines and ldcs
serving the chicago hub that could pick up the slack between oct . 31 and dec .
1 .
alliance ' s jack crawford downplayed the impact of the vector start - up delay
on alliance . " we don ' t think [ there will be ] much effect at all . we have been
working closely with vector . our connection with them , if it ' s not ready , is
very close . we also have five other connections with other [ existing ]
pipelines and ldcs " in chicago . many shippers " understand [ that with ] a
startup the magnitude of ours [ alliance ] and vector ' s , there are likely to be
some bumps at beginning . "
immediate market reaction to the news was somewhat unexpected . the chicago
basis for november widened from a plus 9 . 5 - 10 to plus 11 - 12 tuesday following
vector ' s announcement . that is contradictory to what you would think would
occur , said a chicago trader for a large marketing company . " i was offering
index - plus gas today betting on the chance that will come off by the time
bidweek rolls around , " he said . the effect on the market wasn ' t as profound
as some would have thought , agreed another trader . " in fact , chicago prices
actually strengthened on the news . you would think that with the excess gas
on the market starting nov 1 , the basis would have come off . the only thing i
can think is that people are betting on cold weather showing up in the
chicago market on nov . 1 as well . "
meanwhile dawn prices , which one would have expected to strengthen following
the news , did so , as november basis widened from low 30 s to plus 36 yesterday
following the announcement , a michigan trader said .
the vector pipeline would transport much of the alliance gas from the market
hub in chicago to the hub at dawn , on , as well as provide access to markets
and storage in the upper midwest . the line eventually will carry 1 bcf / d , but
its initial start - up delivery capacity will be 700 mmcf / d . the pipeline is
slated to serve key markets in ontario , quebec , and the u . s . midwest and
northeast .
~ vector shippers were notified of the delay along with the rest of the market
tuesday , although many already had suspected the pipeline wouldn ' t be able to
adhere to its scheduled start - up date . at an ldc forum in chicago a few weeks
ago , a spokesman for vector insisted the pipeline was on schedule , but then
sources said he showed pictures of parts of the pipeline underwater . " folks
who were there knew what that meant . "
presently , more than 90 % of the vector line has been installed and progress
on the springville compressor station is on schedule , according to the
company . the dec . 1 start - up date includes adequate time for any further
weather impacts and for the extensive commissioning and testing programs
necessary , it said , adding vector is scheduled to begin filling the system in
late october to complete the commissioning of facilities .
sponsors of vector include calgary - based enbridge inc . with a 45 % interest ;
westcoast energy inc . of vancouver , bc , with a 30 % interest ; and
detroit - based mcn energy group inc . with a 25 % interest .
vector announces a one - month delay until december 1
note : the market reaction is interesting . one can surmise that quite a bit
of the gas that was contracted for on vector is
firm utility gas . the run up in chicago may be temporary until alternate
arrangements are completed .
vector delay confirms market ' s suspicions
future shippers on the new chicago - to - dawn vector pipeline had their fears
confirmed tuesday when pipeline officials announced that the start - up date
for the project , which was scheduled for nov . 1 to coincide with the start - up
of the long - awaited alliance pipeline , would be delayed until dec . 1 .
vector officials blamed the delay on the excessive rainfall that has hampered
construction of the pipeline , which - - - when completed - - - would provide
initial takeaway for about 700 mmcf / d of the 1 . 3 bcf / d of western canadian
gas that will be shipped to the chicago market by alliance . alliance is due
to begin operations on oct . 31 .
the announcement yesterday left many in the market asking the million - dollar
question : " where will that [ alliance ] gas go ? " in the meantime . alliance
officials noted the line has connections with existing pipelines and ldcs
serving the chicago hub that could pick up the slack between oct . 31 and dec .
1 .
alliance ' s jack crawford downplayed the impact of the vector start - up delay
on alliance . " we don ' t think [ there will be ] much effect at all . we have been
working closely with vector . our connection with them , if it ' s not ready , is
very close . we also have five other connections with other [ existing ]
pipelines and ldcs " in chicago . many shippers " understand [ that with ] a
startup the magnitude of ours [ alliance ] and vector ' s , there are likely to be
some bumps at beginning . "
immediate market reaction to the news was somewhat unexpected . the chicago
basis for november widened from a plus 9 . 5 - 10 to plus 11 - 12 tuesday following
vector ' s announcement . that is contradictory to what you would think would
occur , said a chicago trader for a large marketing company . " i was offering
index - plus gas today betting on the chance that will come off by the time
bidweek rolls around , " he said . the effect on the market wasn ' t as profound
as some would have thought , agreed another trader . " in fact , chicago prices
actually strengthened on the news . you would think that with the excess gas
on the market starting nov 1 , the basis would have come off . the only thing i
can think is that people are betting on cold weather showing up in the
chicago market on nov . 1 as well . "
meanwhile dawn prices , which one would have expected to strengthen following
the news , did so , as november basis widened from low 30 s to plus 36 yesterday
following the announcement , a michigan trader said .
the vector pipeline would transport much of the alliance gas from the market
hub in chicago to the hub at dawn , on , as well as provide access to markets
and storage in the upper midwest . the line eventually will carry 1 bcf / d , but
its initial start - up delivery capacity will be 700 mmcf / d . the pipeline is
slated to serve key markets in ontario , quebec , and the u . s . midwest and
northeast .
~ vector shippers were notified of the delay along with the rest of the market
tuesday , although many already had suspected the pipeline wouldn ' t be able to
adhere to its scheduled start - up date . at an ldc forum in chicago a few weeks
ago , a spokesman for vector insisted the pipeline was on schedule , but then
sources said he showed pictures of parts of the pipeline underwater . " folks
who were there knew what that meant . "
presently , more than 90 % of the vector line has been installed and progress
on the springville compressor station is on schedule , according to the
company . the dec . 1 start - up date includes adequate time for any further
weather impacts and for the extensive commissioning and testing programs
necessary , it said , adding vector is scheduled to begin filling the system in
late october to complete the commissioning of facilities .
sponsors of vector include calgary - based enbridge inc . with a 45 % interest ;
westcoast energy inc . of vancouver , bc , with a 30 % interest ; and
detroit - based mcn energy group inc . with a 25 % interest .