Alaska recommends TransCanada's Alaska gas pipeline

Alaska Gov. Sarah Palin, along with the state's natural resources and revenue commissioners, recommended that the Alaska legislature accept a natural gas pipeline proposal from TransCanada Alaska Co. LLC and Foothills Pipelines Ltd.

By OGJ editors
HOUSTON, May 22 -- Alaska Gov. Sarah Palin, along with the state's natural resources and revenue commissioners, recommended that the Alaska legislature accept a natural gas pipeline proposal from TransCanada Alaska Co. LLC and Foothills Pipelines Ltd.

State officials on May 22 announced they believe TransCanada's plan deserves issuance of a license under the Alaska Gasline Inducement Act (AGIA) along with a $500 million inducement from the state.
Lawmakers will have 60 days to review the license proposal. A special session begins June 3 in Juneau. If the Legislature were to grant TransCanada the license, the company then would hold an open season to solicit firm gas shipping commitments.

After the open season, TransCanada would apply for a federal certificate. If approved by the Federal Energy Regulatory Commission, pipeline construction could begin. Alaska state officials said construction could take up to 3 years.

TransCanada proposes a 4.5 bcfd pipeline that would extend 1,715 miles from a gas treatment plant at Prudhoe Bay on Alaska's North Slope (ANS) to the Alberta hub. The Alaska section of the 48-in. pipeline would be about 750 miles long, and would have five gas delivery points in the state.

Denali 'uncertain'
Palin said TransCanada's plan was binding and enforceable, which she believes makes it more appealing to Alaska than the BP PLC-ConocoPhillips-sponsored Denali gas pipeline proposal.

In April, BP and ConocoPhillips announced they would join resources to build a 4 bcfd gas pipeline from ANS to markets in Canada and the US. They said they plans to spend $600 million over the next 36 months on the first of many phases of the Denali line, namely an open season (OGJ, Apr. 14, 2008, p. 30).

The Denali proposal was not submitted under the AGIA applications. Palin told reporters during a May 22 news conference that no commercial terms are specified under that plan so both costs and benefits to the state are uncertain.

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