Crude Oil Tar Sand Companies

[NYBob]

Alaska approves TransCanada project cost $26 billion pipeline -

News wires

TransCanada has won Alaskan legislative approval to build and operate a huge pipeline to ship natural gas from Alaska’s North Slope to a network feeding US and Canadian domestic markets.

The Alaska Senate voted 14-5 to award a state licence to TransCanada, ratifying an earlier vote by the state House.

TransCanada plans to build a 1,700-mile (2720-kilometre) line to an existing pipeline hub in Canada that would send about 4 billion cubic feet of Alaska natural gas per day to domestic markets.

The TransCanada plan has been promoted by Governor Sarah Palin as the best way to unlock the North Slope's vast natural gas resources, which have been languishing mostly in operating oilfields without any means of transport to a commercial market.

The licence pledges state endorsement of the TransCanada plan, plus a funding match of up to $500 million to get the Calgary-based company's application through the Federal Energy Regulatory Commission, Reuters reported.

Palin and other TransCanada supporters said it was important to get a gas pipeline operator that is independent of the major North Slope oil producers – supermajors BP, ConocoPhillips and ExxonMobil - that own most of the leases to the known 35 trillion cubic feet of natural gas.

The next steps will be to start field work and discussions with the producers that would ship the natural gas in the pipeline, said Tony Palmer, TransCanada's vice president for Alaska gas development.

TransCanada has estimated that the project will cost $26 billion, while consultants hired by the state put the estimate at $31 billion. Under TransCanada's plan, the pipeline would start shipping natural gas in 2018.

BP and Conoco have a separate plan for a similar gas pipeline, which the companies have called "Denali," that was not vying for a state licence. Field work on the Denali project started this summer, the companies reported.

The TransCanada license does not preclude that project or any other North Slope natural gas pipeline project. But it forbids the state from entering into contract negotiations with a pipeline sponsor other than TransCanada.

Opponents of the TransCanada licence said it was too risky for the state.

Senator Bert Stedman, a Republican from Sitka, said he opposed the license because it would lock the state to TransCanada for years, eliminating flexibility and the option to strike a better deal with a different gas pipeline sponsor.

"We need to stay nimble all the time until we get the gas turned on," he said in floor debate. "The market is going to move this line forward. My concern is, this licence is going to tie the state of Alaska's hands. We're going to be unable to respond."
Friday, 01 August, 2008, 22:29 GMT | last updated: Monday, 04 August, 2008, 00:29 GMT

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