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Aiming to feed the United States' energy hunger, Calgary-based TransCanada PipeLines Ltd. is teaming up with a U.S. partner to build a natural-gas pipeline from Ontario to Pennsylvania.

The project, estimated to cost between $350-million and $400-million (U.S.), is expected to include a cross-border tunnel near Buffalo, N.Y.

TransCanada said yesterday it has been working with Buffalo-based National Fuel Gas Co. on studies for the Northwinds Pipeline project from the gas market hub at Dawn, Ont., -- near Sarnia -- to the Ellisburg-Leidy area in Pennsylvania.

"After examining the results from initial technical, environmental and market assessments in Canada and the United States, the companies have decided to pursue commercial development of this project," TransCanada said.

The pipeline would carry natural gas from western sources to growing markets along the East Coast via a 346-kilometre, 76-centimetre natural gas pipeline originating in Kirkwall, Ont., also near Sarnia.

The line would cross into the United States near Buffalo and follow a southerly route to Pennsylvania.

The initial capacity would be about 500 million cubic feet of natural gas a day.

Imports from Canada are crucial to meeting U.S. demand for natural gas, the fuel for more than 90 per cent of new power plants being proposed to ease electricity shortages.

Since 1991, natural gas imports to the United States have doubled to about 10 billion cubic feet a day -- primarily from Canada -- while domestic production has nudged up only 4 per cent to 52 billion cubic feet a day.

"The pipeline route, although not yet finalized, will utilize existing utility corridors and rights-of-way to the greatest extent possible in an effort to mitigate effects of the construction activity," TransCanada said.

Construction is estimated to take between 16 and 20 months.

The targeted in-service date is late 2004, pending approval by U.S. and Canadian regulatory authorities.

National Fuel chief executive officer Bernard Kennedy said the Northwinds Pipeline "is uniquely positioned to be a part of a solution for long-term energy security by building upon existing energy infrastructures and bringing new, low-cost natural gas supplies to growing markets on the East Coast.

"Our existing systems are located at the Canada/United States border and provide the path for new gas supplies to reach markets in western New York, northwestern Pennsylvania and beyond."

More than 3.5 billion cubic feet a day of pipeline capacity and more than 870 billion cubic feet of storage capacity are fed into the regional hub at Dawn.

"Northwinds Pipeline is tailored to meet the needs of the mid-Atlantic and New England markets, which are among the fastest-growing markets on the continent," said TransCanada chief executive officer Hal Kvisle.

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