Gas pipeline applicants pared to one
By JEANNETTE J. LEE
The Associated Press
adn.com
Published: January 4th, 2008 01:11 PM
Last Modified: January 4th, 2008 01:13 PM
Only one of the five applications submitted for the exclusive license to build a natural gas pipeline to transport North Slope gas to market will advance to the next round of public scrutiny, Gov. Sarah Palin announced today.
The application from TransCanada Alaska Co./Foothills Pipelines Ltd. was the only one that met all the state's requirements, Palin said during a press conference in Anchorage.
"We have long stated that it only takes one good application. We're thrilled to have a project sponsor willing to build a pipeline on terms that benefit all Alaskans," Palin said.
The application will be evaluated by the state to determine whether it provides the maximum in benefits to Alaskans and merits issuance of the exclusive license. As part of that, a 60-day public comment period on TransCanada's application opens Saturday and ends March 6.
After that process, if the state determines it meets those requirements, the application will be forwarded to the Legislature for approval. Winning the state license would entitle TransCanada to a package of financial incentives under the Alaska Gasline Inducement Act, or AGIA, a law passed by the Legislature in May.
The winner commits to move forward with plans for a multibillion-dollar pipeline rather than committing to actually building the line.
Winning the state license also doesn't preclude another company from pursuing the pipeline project. Conoco Phillips, the state's biggest oil and gas producer, has made a proposal that falls outside the scope of AGIA.
Other applications with TransCanada's under AGIA that were submitted but did not meet state requirements were from the Alaska Gasline Port Authority, AEnergia, Sinopec ZPEB and Alaska Natural Gasline Development Authority.
Officials from those companies were notified today that their applications did not meet all the requirements set out by the law and will not be evaluated further.
TransCanada is a leading Canadian energy and pipeline company with a long interest in an Alaska gas line.
A North Slope gas line has been discussed since before oil first moved down an 800-mile trans-Alaskan pipeline in 1977. But the prospects only gained momentum in the last few years with natural gas futures trading in the mid-$7 range for 1,000 cubic feet of gas.
In 2006, former Gov. Frank Murkowski settled in principle with BP, Exxon Mobil Corp. and Conoco Phillips on fiscal terms -- taxes and royalties -- for producing the North Slope gas.
It would have frozen oil taxes for 30 years and gas taxes for up to 45 years for the three major oil companies.
Still, that deal did not guarantee a pipeline would get built; the hope was it would enable producers to move forward with a pipeline.
The line would ultimately have delivered 4.5 billion cubic feet of natural gas a day, which is about 7 percent of the current U.S. demand.
But state lawmakers felt the deal had too many giveaways for big firms, including locking in the tax rates. The Legislature never voted on the deal.
That led Palin, who took office 13 months ago, and her administration to chart a different course. Rather than negotiate with one group, her plans called for new guidelines designed to stimulate competition among oil and pipeline companies.
While energy analysts have estimated there to be about 35 trillion cubic feet of proved natural gas reserves in the North Slope, they believe that figure will rise in the future.
A large amount of natural gas comes to the surface when oil is being pumped from Alaska's large-but-dwindling oil fields. But for now, the industry reinjects the gas into the ground.
All the applications are available online at www.gov.state.ak.us/agia.
TransCanada at a glance
* The business: A top Canadian pipeline and power company with 36,500 miles of natural gas pipelines across Canada, the U.S. and Mexico.
* Headquarters: Calgary
* Work force: 3,550 employees
* Chief executive: Hal Kvisle
* 2006 financials: $1.1 billion profit on $7.5 billion in revenue
* Web site: www.transcanada.com
Source: TransCanada Corp. |
