Alaska's North Slope Producers Propose Building Natural Gas Pipeline
biz.yahoo.com
Friday December 17, 3:44 am ET
By Mary Pemberton, Associated Press Writer
ANCHORAGE, Alaska (AP) -- Alaska's three largest North Slope oil producers are proposing to build a pipeline to bring North America's largest natural gas reserves to the lower 48 states. ExxonMobil Corp., ConocoPhillips and BP own Alaska's natural gas.
Gov. Frank Murkowski said Thursday he received a joint proposal Wednesday from the companies after months of negotiations.
"For the first time ever, the producers have made a proposal to build a natural gas pipeline," the governor said. "We finally have a concrete proposal from the producers who hold the gas leases."
The project is a top priority, said BP and ConocoPhillips Co. ExxonMobil did not immediately return a call for comment.
"We have provided the state with a comprehensive fiscal proposal for the Alaska gas pipeline project," said Dave MacDowell, BP's Alaska gas spokesman.
ConocoPhillips spokeswoman Dawn Patience also said the project is key.
"We are encouraged by the progress in our negotiations," Patience said. "We hope the legislature will help us move forward."
Murkowski said the proposal covers the entire project, estimated to cost $20 billion.
The North Slope has an estimated 35 trillion cubic feet of known gas resources, and perhaps 100 to 200 trillion cubic feet yet to be found. North Slope producers currently reinject the natural gas that comes with oil production back into the ground where it can be recovered.
The pipeline would extend from the North Slope to Fairbanks, and southeast to Alberta, Canada. From there, it would go to the Chicago area.
It could deliver an estimated 4 1/2 billion cubic feet of natural gas a day for decades to North American markets, MacDowell said.
The North Slope producers' proposal contains a provision sought by the state -- ownership in the pipeline.
BP, ConocoPhillips and ExxonMobil spent $125 million on a joint feasibility study in 2001-2002. It concluded that the economic risks were too great to the companies.
The project, however, gained fresh momentum when Congress promised loan guarantees for 80 percent of the pipeline's cost, and gave developers other tax breaks as well as promises of less burdensome permitting requirements. |
