Pay for the Piper

OIL & GAS

When Texas Oilman Clint Murchison was asked last March what he considered the major achievement of his life, he replied: "I'm still trying to accomplish it in this Canadian pipeline, which I am trying to consummate to a final conclusion successfully." Last week Murchison's major achievement moved a long pipe length closer to successful consummation.

Through his Canadian Delhi Petroleum Ltd., Murchison has control of i 1trillion cu. ft. of gas underground in Alberta. In combination with other gas interests, Delhi formed the Trans-Canada Pipelines Ltd. to build a line across the dominion to supply the gas-starved east. Estimated cost of the 2,240-mile line: $350 million.

Trans-Canada planned originally to run a spur line from Winnipeg south to rich U.S. markets, but this proposal was vetoed by the Canadian government, which as a matter of national pride wanted the company to build the line across Canada to Toronto and Montreal before shipping any gas to the U.S. Because much of the route would be through thinly populated areas where there are no cash customers for gas, potential investors objected that Trans-Canada would have no income while the line was being built and, even after it was completed, would still have to develop its eastern market.

Last week Murchison answered that argument by signing up a customer for Trans-Canada. Tennessee Gas Transmission Co. contracted to buy 200 million cu. ft. of Alberta gas daily at the Manitoba-Minnesota border, and another 200 million cu. ft. a day when more gas becomes available. To supply T.G.T., Trans-Canada will build the first 670-mile leg of its line from the fields in Alberta to Winnipeg and the border. From the Minnesota border below Winnipeg, T.G.T. will build a $100 million, 1,050-mile pipeline to its trunk line at Portland, Tenn., selling Canadian gas on the way through Wisconsin, Illinois and Indiana.

To satisfy proud Canadians and wary bankers, T.G.T. and Trans-Canada agreed that when the transcontinental line is built Tennessee Gas will stop delivering Texas gas to eastern Canada through its line at Niagara. At that time (probably 1957) T.G.T. will reverse the flow and take into the U.S. any surplus gas in eastern Canada. To prepare its eastern market, Trans-Canada this year plans to build a 350-mile line from Toronto to Montreal.

With a big, steady customer like T.G.T. on the line, Trans-Canada should now be able to line up plenty of capital to complete its line to the east, thereby consummating the achievement of Murchison's life.

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