MANAGEMENT ’ S DISCUSSION AND ANALYSIS Other Iroquois Expansion Projects Iroquois/Portland Ownership Changes Portland Rate Application Northern Development Northwinds Pipeline 2001 ANNUAL REPORT  25 In September 2001, TransCanada and National Fuel Gas Supply Corporation announced the formation of a strategic partnership to evaluate the feasibility of developing a new natural gas pipeline project (Northwinds Pipeline) to provide transportation service from Dawn, Ontario to the Ellisburg-Leidy area in Pennsylvania. The partnership is currently evaluating market sup- port for the project. All costs incurred to date related to northern development have been expensed as incurred. TransCanada spent considerable time in 2001 gathering input from producers with natural gas reserves in the WCSB and the two Arctic basins on options for moving northern gas once it reaches Alberta. As a result of these discussions, TransCanada has developed a comprehensive plan that provides flexibility and choice for all producers to move their natural gas. This plan ensures costs are effectively managed by using existing infrastructure where possible and by expanding in increments based on the volumes to be shipped. The company continues to refine and discuss this plan. In November 2001, TransCanada was one of ten companies, known as the ANGTS Group, to sign a Memorandum of Understanding to begin developing an initial commercial transportation proposal relating to northern slope gas production in Alaska. The group is pursuing development of the Alaska Natural Gas Transportation System, also known as the Alaska Highway project. The ANGTS Group completed the initial proposal in 2001 and is discussing details on this complex project and potential commercial arrangements with Alaska North Slope producers. TransCanada actively continues to pursue pipeline opportunities to move both Mackenzie Delta and Alaska North Slope natural gas to markets throughout North America. TransCanada worked with key stakeholders in 2001 to promote a stand-alone Mackenzie Valley pipeline project. The Mackenzie Delta producers have indicated they would prefer to use TransCanada’s existing Alberta System for gas to be transported to markets. Portland filed a Rate Application with the FERC in October 2001. Portland will be operating under a FERC approved interim toll commencing April 1, 2002, until a final toll is determined. In May 2001, TransCanada purchased an additional 5.96 per cent interest in Iroquois, bringing its total interest to 40.96 per cent. In June 2001, TransCanada purchased an additional 11.88 per cent interest in Portland, bringing its total interest to 33.29 per cent. TransCanada holds the largest ownership interest in both Iroquois and Portland. Three applications were filed with the FERC in the fourth quarter of 2001, which if approved would see total capital additions of US$148 million to the pipeline system occurring between 2003 and 2005. Tuscarora operates a 369 kilometre pipeline system transporting gas from Malin, Oregon to Reno, Nevada with delivery points in north- eastern California. TransCanada owns an aggregate 17.4 per cent interest in T uscarora, of which 16.4 per cent is held through TransCanada’ interest in TC PipeLines, LP. Portland operates  a 471 kilometre pipeline which  connects with TQM near Pittsburgh,  New Hampshire and  has delivery points in Massachusetts. TransCanada increased its interest in Portland to 33.29 per cent  in 2001. Foothills Pipe Lines  Ltd. (Foothills) carries natural gas for export from central Alberta to the U.S. border to  serve marketsin the U.S. Midwest, Pacific Northwest and California. Tr ansCanada owns 50 per cent of Foothills, 69.5 per cent of Foothills (Sask.), 74.5 per cent of Foothills (Alta.) and 74.5 per cent of Foothills (South B.C.). Together these pipelines systems  total 1,040 kilometres in length. FOOTHILLS PORTLAND  TUSCARORA 