Investors pull out of TransCanada's Colorado pipeline project

TransCanada Pipelines Ltd. was sent scrambling for new partners Tuesday after two potential investors pulled out of a proposed natural gas pipeline though the U.S. Rocky Mountains.

This week, Fort Worth, Texas-based Quicksilver Gas Services LP and Houston's Enterprise Products Partners LP both decided not to go through with an agreement to buy a 50-per-cent stake in TransCanada's Pathfinder project, a 1,084-kilometre pipeline to move natural gas to North Dakota from Colorado .

"Given the condition of the credit markets, we were in the position of really having to pick and choose the most attractive projects in our stable of initiatives," Enterprise spokesman Rick Rainey told the Denver Post this week.

"While … we think it definitely is necessary to bring some production out of the Rockies, we decided to go and pursue projects that were going to give us a little bit more attractive return."

The pipeline is estimated to cost $2 billion US and was expected to begin moving 1.2 billion cubic feet of gas per day starting in November 2010.

TransCanada, based in Calgary, says it is working with prospective shippers to carry out the project.

In May, the two U.S. natural-gas processors signed a memorandum of understanding with TransCanada in which Enterprise would buy a 40-per-cent share of the project while Quicksilver would invest for a further 10-per-cent stake in the pipeline.

As well, the two companies were supposed to fill up the pipeline with 500 million cubic feet per day for 10 years.

TransCanada now is forced seeking other sector players with $1 billion US in cash.

with files from Canadian Press