Pipeline Profiles: Alliance

Pipeline system and key points

Updated September 2018

The Alliance Pipeline owned by Alliance Pipeline Limited Partnership began operations in 2000. It is unique among major Canadian natural gas pipelines because natural gas liquids may be left in the natural gas stream. Alliance transports liquids-rich natural gas to the Chicago market hub. Extraction of the natural gas liquids occurs at the Aux Sable facility located near Chicago.

The pipeline system draws from 59 receipt points, largely concentrated near the northern end of the system in northeastern B.C. and northwestern Alberta. The Alliance Pipeline continues through Saskatchewan and connects to the Alliance USA Pipeline at the Canada-U.S. border near Elmore, Saskatchewan.

Official Board documents related to the construction, operation and maintenance of the Alliance pipeline can be found here: Alliance pipeline regulatory documents [Folder 90699].

You can see the Alliance Pipeline and all NEB-regulated pipelines on the Board’s Interactive Pipeline Map. The map shows more detailed location information, the products carried by each pipeline, the operating status and more.

Alliance pipeline system map

Condition Compliance

Updated September 2018

Every pipeline company in Canada must meet federal, provincial or territorial, and local requirements. This includes Acts, Regulations, rules, bylaws, and zoning restrictions. Pipelines are also bound by technical, safety, and environmental standards along with company rules, protocols and management systems. In addition to these requirements, the Board may add conditions to regulatory instruments that each company must meet. Condition compliance is monitored by the Board and enforcement action is taken when required. For a detailed list of conditions that Enbridge must meet, and their status, please see the condition compliance table and search for “Alliance Pipeline Ltd.”

Safety Performance

Updated September 2018

The Board holds the companies it regulates accountable to protect the safety of Canadians and the environment. As part of this accountability, companies must report events such as incidents and unauthorized activities to the Board. For a summary of pipeline incidents and unauthorized activities on the Alliance pipeline since 2008, visit the Safety performance dashboard and select “Alliance Pipeline Ltd.”

Emergency Management

Updated September 2018

The NEB checks to make sure companies are keeping pipelines safe by doing inspections, in-depth safety audits, and other activities. Yet, even with these precautions, an emergency could still happen. Sound emergency management practices improve public safety and environmental protection outcomes, and provide for more effective emergency response.

The NEB holds its regulated companies responsible for anticipating, preventing, mitigating, and managing incidents of any size or duration. Each company must have an emergency management program that includes detailed emergency procedures manuals to guide its response in an emergency situation. We oversee the emergency management program of a regulated company’s projects until they cease to operate.

The Board requires companies to publish information on their emergency management program and their emergency procedures manuals on their websites so Canadians can access emergency management information. To view Alliance’s Emergency Response Plan, go to its Emergency Management and Response website.

Throughput and capacityFootnote 1

Updated quarterly

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Tolls

Updated September 2018

A toll is the price charged by a pipeline company for transportation and other services. Tolls allow pipeline companies to safely operate and maintain pipelines. Tolls also provide funds for companies to recover capital (the money used to build the pipeline), pay debts, and provide a return to investors. The interactive graph below shows the tolls for key paths on the pipeline since 2006.

Alliance began operations in 2000, supported by 15-year firm transportation contracts. In 2014 Alliance applied for Board approval of new services and tolls on the pipeline. In 2015 the Board approved the firm tolls and new services, and granted Alliance discretion in setting bid floors for seasonal firm service between 100% and 125% of the applicable 5-Year firm toll, and up to 125%, for interruptible service. By the time the new services were implemented on December 1, 2015, the pipeline was fully contracted under the proposed toll framework, which includes market based rates.

Shippers pay lower term-differentiated tolls if they contract for service for a longer period of time and tolls are charged by zone. Zone 1 includes all receipt points downstream of the Blueberry Hill Compressor Station near Gordondale, Alberta. Zone 2 includes the Blueberry Hill Compressor Station and all receipt points upstream of that station. Alliance also has a notional point known as the Alliance Trading Pool (ATP) where natural gas can be traded. Shippers have the option of contracting for service to or from the ATP only, or using the traditional full path service.

Under the new toll regime, firm tolls decreased about 35% on 1 December 2015. However, shippers must pay for interruptible service if they want to move additional natural gas. Previously the tariff included an authorized overrun service under which the firm shippers could move up to 10% more natural gas at no additional cost other than fuel when capacity was available.

A list of shippers on the Alliance pipeline is available on the Alliance website, (Index of Customers).

Official Board documents related to the traffic, tolls and tariffs for the Alliance pipeline can be found here: Alliance pipeline toll documents [Folder 285030].

Abandonment funding

Updated May 2018

The Board requires all pipelines to set aside funds to safely cease operation of a pipeline at the end of its useful life. In 2016, Alliance Pipeline Ltd. estimated it would cost $365 million to do this. These funds will be collected over 40 years and are being set aside in a trust. Official Board documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Pipeline financial information

Updated September 2018

Alliance Pipeline Limited Partnership (APL) earned a return on equity of 11.26% in each of its first 15 years of operation. Return on equity was based on an approved baseline rate of 12.0% with an adjustment for cost overruns during construction. In December 2015, APL began operating under its new services offering and earned a return on equity of 26.2% and 31.4% in 2016 and 2017 respectively. APL reports it’s achieved return on equity in annual compliance filings to the Board, and is required to file other information with the Board on a quarterly basis. Previously, APL was exempted from filing quarterly surveillance reports with the Board.

Pipeline companies report important financial information to the Board quarterly and/or annually. A strong financial position enables companies to maintain their pipeline systems, attract capital to build new infrastructure, and meet the market’s evolving needs. The data in this table comes from Alliance quarterly filings with the Board [Folder 2931363].

Table 1: Alliance Pipeline financial data
  2012 2013 2014 2015 2016 2017
Deemed equity ratio 30% 30% 30% 30% 40% 40%
Achieved return on equity 11.26% 11.26% 11.26% 11.26% 26.2% 31.4%
Total revenue (millions)         $519 $560
Rate base (millions)       $1 342 $1 303 $1 228

Corporate financial information

Updated February 2018

Alliance Pipeline is owned by Alliance Pipeline Limited Partnership, which is a 50/50 partnership between Enbridge Income Fund (rated BBB (high)) and Pembina Pipeline Corporation. In 2016, Alliance Pipeline accounted for 4% of Enbridge Inc.’s earnings.

Credit ratings and financial ratios provide an idea of the financial strength of a company, including its ability to attract capital to build new infrastructure and meet financial obligations. DBRS discontinued its rating of Alliance in 2015 at the request of the company. Moody’s downgraded Alliance’s rating in 2015 based largely on shorter contracts and weaker shipper quality, noting at the time that significant progress in re-contracting the pipeline led them to change the outlook to stable. The financial ratios provided below were calculated by DBRS.

Table 2: Alliance Pipeline Limited Partnership financial ratios and credit ratings
  2012 2013 2014 2015 2016 2017
Interest and Fixed-Charges Coverage Ratio (DBRS) 2.29 2.41 2.58 2.75 Not rated
Cash Flow-to-Total Debt and Equivalents Ratio (DBRS) 18.5% 21.2% 22.3% 27.4% Not rated
DBRS Credit Rating A (low) A (low) A (low) BBB Not rated
Moody’s Credit Rating Baa1 Baa1 Baa2 Baa3 Baa3 Baa3

Financial regulatory audits

Updated February 2018

The Board audits pipeline companies to confirm compliance with the National Energy Board Act, regulations, Board orders and Board decisions. Financial regulatory audits focus on toll and tariff matters such as detecting cross-subsidies. Alliance’s last audit was completed in March 2009. Official Board documents related to Alliance’s financial regulatory audits can be found here: [Folder 571483]

Date modified: