State solicits gas pipeline bids -
AGIA: Firms have until Oct. 1 to submit plans for moving Alaska gas.
adn.com
By STEVE QUINN, The Associated Press
Published: July 4, 2007
Last Modified: July 4, 2007 at 04:15 AM
JUNEAU -- Let the bidding commence.
Alaska Gov. Sarah Palin said Tuesday the state is ready to receive applications to build a natural gas pipeline officials believe will ultimately deliver trillions of cubic feet of reserves to market.
Alaska has struggled for decades to get a deal either with North Slope producers or independent pipeline companies to build a line that could possibly run from the North Slope through Canada and into the Midwest.
Palin said Tuesday's development reprises the burning question the administration has faced since the bill was introduced in March: just how many meaningful applications will arrive by the Oct. 1 deadline.
Oil and independent pipeline companies have until that fall date to submit an application that must outline details such as the pipeline's route, the market it will serve and how it can build a pipeline and avoid cost overruns.
In May, lawmakers heeded the warning when passing the Alaska Gasline Inducement Act designed so producers and independent pipeline companies can vie for special rights to build the pipeline.
The new law is designed to stimulate competition by offering a matching grant of up to $500 million to the license winner.
Some independent producers and pipeline companies said AGIA is balanced and could stimulate more North Slope exploration.
North Slope lease holders BP, Exxon Mobil Corp. and Conoco Phillips, however, have panned Palin's plan as too restrictive and not financially viable for them.
WILL BP, CONOCO STEP UP?
BP reiterated its concerns in a prepared statement, adding that it has not given up on the project.
Conoco's Brian Wenzel, vice president of North Slope gas development, offered a similar comment:
"The company agrees that development of Alaska's North Slope gas resources is important to the state and the nation, and we're trying to find a best path forward to make it happen."
Exxon Mobil did not immediately return e-mails seeking comment.
Palin said she has spoken to CEOs from all three companies recently and believes they will participate in AGIA, perhaps as producers supplying gas to the pipeline but not pipeline owners.
She said she did not ask any of the companies' leaders about their plans to submit a bid to build the pipeline.
Since the regular legislative session ended in May, Palin's administration said more companies have emerged with interest in AGIA, including Houston-based El Paso Corp., one of the nation's largest natural gas pipeline operators.
Sen. Gene Therriault, R-North Pole, said he doesn't want the three oil companies to be automatically precluded but said the state would benefit more if producers didn't have complete control as both pipeline owner and producer of the gas.
Still, the uncertainty over getting competitive bids lingers until applications arrive. That's what drove House Majority Leader Ralph Samuels, R-Anchorage, to post the lone dissenting vote on Palin's bill.
"They stuck to their timeline and that's good," Samuels said. "Now, we'll have to wait and see who comes to the table."
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Clock starts ticking on gas pipeline
Here's the Palin administration's timetable for choosing a company that will get a state license and other help for a natural gas pipeline from the North Slope.
• MONDAY: Palin administration issued "requests for applications."
• JULY 23: Applicants can propose modifications to the application guidelines until this date.
• OCT. 1: Application deadline.
• NOVEMBER/DECEMBER All applications made public for a 60-day comment period after the governor's gas pipeline team completes initial review.
• JANUARY: The governor expects to submit her selection to the Legislature soon after lawmakers convene Jan. 15.
• WINTER/SPRING 2008: Legislators have 60 days to approve the applicant. If they fail to approve the applicant, the governor must start fresh seeking new applications.
• APRIL 2008: The state can issue a license if the Legislature approves the applicant.
• SPRING / SUMMER 2008: The licensee may begin field work.
• SOMETIME AFTER SUMMER 2008: How long the rest of the project takes depends on the proposed pipeline, the federal certification process and the pipeline operator's ability to secure customers to ship gas. |
