Producer controlled transportation and other innovations

The emergence of producer-driven natural gas pipelines in Alberta was chronicled, providing a brief history of gas pipeline development in the province. The relationship between risk taking and reward expectations was explained as a prelude to a description of Alliance Pipelines, and its proposal to establish a competitive transportation market and international commodity pricing for Alberta gas. Owners of Alliance represent about 25 per cent of gas production in Western Canada. Equity participation is by way of ownership of units in three limited liability partnerships, and of shares of three general partners that manage the affairs of the limited liability partnership. This arrangement allows participating gas producers to avoid putting Alliance Pipelines' debt on their balance sheets, and to achieve certain tax advantages. Equally important, the partnership structure provides a solid foundation for risk/reward allocation among the partners. Details about proposed operating procedures, Alliance Pipelines' obligations to its owners, and the benefits of ownership were discussed. Alliance Pipelines Co. has the tacit approval of the Alberta government to let the market decide and its promise not do anything to jeopardize Alliance's competitive position vis-a-vis other pipelines. Applications have been submitted for Federal Energy Regulatory Commission (FERC), and National Energy Board (NEB) approvals