Calgary. An official working on Alaska's proposed Denali pipeline said the multibillion dollar project will move ahead without help from the Alaskan government, which its competitors have already secured.
BP and ConocoPhillips are working together on Denali, which would transport 4 billion cubic feet of natural gas from Alaska's North Slope to southern markets. That amount would represent up to 8 percent of daily U.S. natural gas consumption.
Calgary-based TransCanada Corp. and Exxon Mobil Corp. have proposed a competing pipeline that could cost as much as US$41 billion and has the support of the state through the Alaska Gas Inducement Act, or AGIA. The act, introduced in 2007 by then-governor Sarah Palin, is designed to advance the construction of a natural gas pipeline from the North Slope to sell to southern markets.
Bob Bleaney, general manager of Denali Canada, told the Canadian Institute's Arctic Gas Symposium earlier this week that no proponent has an exclusive right to build pipelines in the United States or Canada.
The green light granted to TransCanada under the gas act in early 2008 was not in itself a license to build a pipeline, but it does come with the incentive of up to $500 million in state funding. But Bleaney noted that funding comes with strings attached.
Bleaney said proceeding outside of AGIA is beneficial because project developers are not tied to particular conditions. Bleaney said he thinks BP and ConocoPhillips have a better opportunity to bring forward a successful project without state support.
Both groups are getting ready to hold open seasons, which are essentially invitations for shippers to participate in their projects. TransCanada and Exxon Mobil will hold its open season between May and July, and Denali will go through that process between July and October.
BP, ConocoPhillips and Exxon Mobil are the three biggest energy players in Alaska's North Slope.
Tony Palmer, TransCanada's vice president of Alaska development, told reporters at the conference that having government and industry on the same page for a project of this scale is critical.
Palmer said the act has set out what TransCanada's obligations are to the state and what the state's obligations are to the company, providing TransCanada with a clear understanding of how to proceed.
TransCanada and Exxon Mobil have offered BP and ConocoPhillips an equity stake in their proposal, but so far no negotiations have taken place, he said.
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