The Fund has a 50% interest the 3,719-kilometre Alliance System, which transports close to 1.6 billion cubic feet per day of liquids rich natural gas from western Canada and the Bakken region to delivery points near Chicago, Illinois.
Alliance Canada consists of 1,560 kilometres of the Alliance System’s mainline beginning near Gordondale, Alberta, and connecting to the Alliance Pipeline U.S. at the Canada/U.S. border near Elmore, Saskatchewan. Alliance Canada also consists of lateral pipelines that connect the Alliance System’s mainline to several upstream receipt points – primarily at natural gas processing facilities in northwestern Alberta and northeastern British Columbia – and related infrastructure.
In the Chicago area, the Alliance System connects with two local natural gas distribution systems and five interstate natural gas pipelines, providing shippers with access to markets in the midwestern and northeastern United States and eastern Canada, as well as access to the Aux Sable Liquid Products Inc. (Aux Sable) fractionation plant, which extracts natural gas liquids from Alliance’s high-energy natural gas stream. The Aux Sable plant is one of the largest liquids processing facilities in North America. ENF’s sponsor, Enbridge Inc., holds a 42.7% equity interest in Aux Sable.
Alliance Pipeline received regulatory approval from the Federal Energy Regulatory Commission (FERC) and the NEB, for the U.S. and Canadian segments of the pipeline, respectively, of its New Services Framework. The New Services Framework is an attractive market-focused approach that we believe provides our customers with variety of service offerings and tolling options for the safe and reliable transportation of their gas. At the same time it enables Alliance to more effectively respond to evolving market conditions and capture upside when market conditions allow.
Shipments under the New Services Framework will begin in Canada in December 2015 and are expected to commence at the same time in the U.S. Long-term contracts to a level of total targeted capacity have been secured through staged and non-staged receipt or full path services with an average contract length of approximately five years.
The Alliance System is expected to be well utilized for years to come. The system is designed to cost effectively transport high-energy gas – gas rich in ethane, propane, butane, and other liquids – to premium markets in the United States. The system is also well positioned geographically. It traverses the Montney, Duvernay and Bakken plays, where production of liquids rich gas is currently projected to grow to 6 billion cubic feet per day in the next five years.