content_image/75395.jpg
## Q & A 

## When will a northern pipeline become a reality? Q 

<img src='content_image/75395.jpg'>

The Alaska Highway and Mackenzie Valley pipelines will proceed when producers are ready to develop the gas reserves and commence production, and when regulatory approvals are in place. Once the pipeline approvals and logistics are in place, each pipeline will take approximately two years to construct. Given this schedule, we expect it will be five to ten years before either pipeline is operating. A 

We are convinced that gas from both Prudhoe Bay and the Mackenzie Delta will be needed to offset declines from existing basins and meet growing demand. The combined initial volumes from Prudhoe Bay and the Mackenzie Delta will be less than five per cent of North American gas demand. We expect the North American market will absorb those volumes very quickly. 

## Recently, you’ve had spare capacity on your pipeline systems. What steps are you taking to fill the pipe? Q 

First, it’s important to understand that spare capacity is not necessarily a bad thing. Through the 1990s, western Canadian producers were plagued by a shortage of pipeline capacity as production grew faster than new pipeline capacity could be approved and constructed. Gas that could have been exported to strong markets in the U.S. was trapped in Canada, result- ing in wide price differentials and weak wellhead prices. This was an undesirable outcome that could have been avoided if there had been some mechanism to ensure a reasonable amount of spare capacity. We have committed to producers that we will do everything we can, working with them, to ensure there is never again a shortage of capacity. A 

Our current spare capacity enables us to quickly and effectively capture new supply opportunities. By maintaining spare capacity in Alberta and on our Canadian Mainline, we are able to accept incremental gas on short notice under short-term contracts – we could not do that when our pipes were running at capacity. Our flexibility and rapid response enabled us to capture the largest share of gas volumes from Ladyfern, one of the most significant gas discov- eries in Western Canada in many years. Most of the Ladyfern gas is moving from British Columbia onto our Alberta System, from which it can be transported virtually anywhere in North America. 

TransCanada is also working with industry to optimize our rates and service offerings to increase the value of our transportation capacity to customers. 

## In light of the difficulties faced by many energy companies in the latter half of 2001, what is your outlook for TransCanada? Q 

We believe it’s a good time for TransCanada to grow our core businesses of natural gas transmission and electric power. The longer-term business fundamentals remain strong with increased demand for both natural gas and electricity driven by population and economic growth. A 

At the same time, in the wake of the uncertainty in the energy sector in late 2001, we’ve experienced a renewed focus on credit quality, strong capitalization and stable operations. For TransCanada, where we’ve spent the last several years 

