Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Douglas V. Fant who wrote (4762)	12/2/2001 3:53:57 AM
From: nspolar	Read Replies (1) \| Respond to of 36161

Douglas, here is the latest local news release. As you probably know there is a LOT of gas on the northslope. As I recall earlier this yr the consortium (BP, EX and P) stated it would take prices above $3 (steady) to make a viable project. Might even have been $4. It wasn't far from cost of LNG delivered to the lower 48, from foreign markets. Regardless of route taken the total project would probably be 20 billion plus. To utilize the gas means more than just a pipeline heading south, but additional trunks to deliver the large quantities to areas that would consume it. BP: Gas pipeline not viable November 30, 2001 By MARY PEMBERTON Associated Press Writer ANCHORAGE--More than $100 million spent on studying the feasibility of delivering North Slope gas to the Lower 48 indicates the project does not make economic sense, BP's gas expert told industry executives on Thursday. BP Vice President Ken Konrad told a meeting of the Resource Development Council that Alaska's big three oil companies have spent the last year and large amounts of money evaluating the project. Work on the data will be done by the end of the year and a report completed as early as February or March, he said. Konrad expects the report to say the project is not economically viable right now. "We simply cannot invest in projects where risks outweigh rewards," he told the group. That would put the huge international company out of business, he said. For the project to go forward, BP, Exxon Mobil and Phillips Petroleum need both state and federal governments to move more quickly. "We need government to keep up with us," Konrad said. The companies need federal legislation that would speed permitting for the pipeline, he said, calling that legislation a "must have." Delays in getting a national energy bill passed have not helped the project, Konrad said. There was some movement in that area Thursday. Alaska Sen. Frank Murkowski and other Senate Republicans won the right for a vote next Monday on an energy bill that includes drilling in the Arctic National Wildlife Refuge. The state has also failed to provide the companies with a clear understanding of how taxes and royalties from the proposed pipeline would be handled, Konrad said. "This is by no means to say we have given up," he said. "Alaska gas can and will happen. We just need to get everyone in the same boat rowing at the same time." Sen. John Torgerson, chairman of the Joint Committee on Natural Gas Pipelines, told the group that the state won't back off its commitment to a southern pipeline route along the trans-Alaska oil pipeline and Alaska Highway to Alberta. State politicians believe that route would benefit Alaskans most. A route across the Beaufort Sea then south through Canada is favored by some Canadians because it would tap rich reserves being developed in the Mackenzie Delta. Roger Simmons, consul general of Canada, assured the group that the Canadian government is neutral on a route. He said his government believes the gas producers should make that decision. Joe Marushak, vice president for Phillips Alaska, said his company continues to support the southern route because Phillips believes it will be easier to permit and to expand in the future. Phillips announced earlier this month it would merge with Conoco Inc. in a $15.4 billion deal that would create the nation's third-largest oil and gas company. BP is not interested in fighting the state, or any other government, over a preferred route, Konrad said. "No project will go ahead unless all governments agree to it," he said.