Based on high demand for our transportation service to the Chicago market hub, Alliance began an economic study in Q1 2017 to assess the feasibility of adding compression facilities on its pipeline system to increase throughput capacity. On March 13, 2017, Alliance announced a non-binding request for expressions of interest for such additional natural gas transportation service on its pipeline system. The call for non-binding expressions of interest generated a strong shipper response in support of the capacity expansion.
Since then, that and other information has been factored into the study underway to determine the long-term commercial viability of the potential expansion. Alliance is looking at a range of factors, including market outlook, capital cost requirements and commercial underpinnings.
Initial study work has been completed and we are now proceeding to refine and optimize the proposed design basis for the project. As a result, timing for an open season has been moved to Q1 2018 from Q4 2017.
Other factors being considered include regulatory process uncertainty about the potential inclusion of upstream and downstream greenhouse gas emissions in a project’s public interest assessment. The uncertainty creates new material risk for Alliance’s potential capacity expansion.
Alliance is also continuing to use a major global project planning firm to increase the likelihood of successful project execution and transportation rates consistent with projections.
The prospective in-service date for the capacity expansion project has been impacted by the continuing facility optimization work being done for the project feasibility study, and by risk and project execution considerations as noted. The projected in-service date of November 1, 2020, for the potential capacity expansion has now been re-forecast for the second half of 2021.