TransCanada's Alaska Natural Gas Pipeline Project to Move Forward

Thursday, 03 May 2012 01:55 PM


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The state of Alaska on Wednesday gave TransCanada Corp. permission to shift its attention to a natural gas pipeline project that would be capable of overseas exports.

This wasn't unexpected: TransCanada had asked the state to allow it to curtail its work on a line that would run from Alaska's North Slope into Alberta, Canada, to instead focus on a liquefied natural gas project after the North Slope's major players announced in late March that they were aligning with the company to pursue such a project.

Gov. Sean Parnell had wanted all parties on the same page as a way to jump-start seemingly stalled progress on a line. He said if the market had truly shifted from the Lower 48 he wanted the companies to unite behind a project that would allow for liquefied natural gas exports to the Pacific Rim.

TransCanada, which has an exclusive license with the state to pursue a line, had been focused mainly on the Alberta option but after nearly two years it has yet to announce any agreements with producers for it. The company faced an October deadline to apply to the Federal Energy Regulatory Commission for a certificate to build and operate the pipeline.

But on Wednesday, the Alaska Revenue and Natural Resources commissioners pushed that deadline back two years, to 2014, as TransCanada requested to accommodate the change in focus. The work done to date is to be preserved.

The commissioners also want TransCanada to conduct a "comprehensive and meaningful" public solicitation of interest in a liquefied natural gas project by Dec. 31. TransCanada, under terms of its agreement, already was obligated to solicit the market some time this year to gauge interest in a project.

TransCanada is expected to finish its initial work on the project by September, according to Kurt Gibson, director of the Alaska Gas Pipeline Project Office. He said that would include things like determining the destination for a line and the appropriate size and associated throughput.

TransCanada also will be expected to come back to the commissioners early next year with details of a liquefied natural gas project and timeline.

Parnell, in his State of the State address, said that by September, the state expected the companies involved to come up with a project, associated work schedule and cost estimates.

The state does not have agreements, like it has with TransCanada, with the major North Slope players, Exxon Mobil Corp., BP, and ConocoPhillips.

But Gibson said the companies have a duty to produce from their leases and he said he thinks they see the opportunity before them and feel the same urgency as the state does for commercializing Alaska natural gas.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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