Paula Dittrick
Senior Staff Writer
HOUSTON, Apr. 10 -- TransCanada Corp. said it will seek alignment with Alaska North Slope natural gas producers to build an Alaska natural gas pipeline, adding that it is unclear how a proposed joint pipeline by ConocoPhillips and BP PLC fits into requirements outlined by the state of Alaska.
TransCanada said it was "encouraged that two of the three producers are ready to advance the project and get Alaskan gas to markets in the Lower 48 states." ExxonMobil Corp. is the other ANS producer.
ConocoPhillips and BP announced Apr. 8 plans to build a 4 bcfd gas pipeline called Denali that would extend from ANS to Canada and potentially on to the US (OGJ Online, Apr. 9, 2008).
BP and ConocoPhillips called the proposed Alaskan gas line the "largest private-sector construction project ever built in North America." They plan to spend $600 million over the next 36 months on an open season, which is slated to begin before yearend 2010.
TransCanada spokeswoman Cecily Dobson told OGJ Apr. 10 that TransCanada has sought for several years and continues to seek alignment with the three ANS gas producers and the state of Alaska.
"We continue to believe that the alignment of these five parties is the best and fastest way to get the project completed," Dobson said. "If alignment with producers does not occur, this could turn out to be a competitive environment."
The TransCanada project is the only proposal sanctioned by Alaska's state government. TransCanada retains Canadian rights to an Alaska pipeline from approvals granted 30 years ago when the line was first proposed.
Alaska earlier this year adopted the Alaska Gasline Inducement Act (AGIA), legislation designed to advance construction of a gas pipeline from ANS. It requires a pipeline project builder to meet certain requirements that will advance the project, in exchange for a license that provides up to $500 million in matching funds.
These funds would help reduce the financial risks that such a huge project faces in its early stages.
Dobson said TransCanada is at stage two of the process and awaits Gov. Sarah Palin's decision whether or not to recommend TransCanada's project to the legislature.
"We expect to receive the decision the week of May 19," Dobson said. "If recommended, our application would go to the legislature for approval. At this point, it's unclear on where [the] BP and ConocoPhillips proposal fits."
Contact Paula Dittrick at [email protected].