Becky Bohrer, The Associated Press, Alaska Daily News, Dec. 7, 2010
JUNEAU — TransCanada Corp. says it might not meet its target of securing binding agreements by year’s end for a multibillion-dollar natural gas pipeline in Alaska, but the company remains optimistic about the prospects for its project.
|Oh, come on. This pipeline is as dead as the Mackenzie Gas Project - and will remain so until gas prices rise and rise and then get supported by guarantees made by one (or more) federal governments. Of course, death in the energy biz is a temporal thing, and all projects experience reinvigoration when the money comes calling. But for now - nobody's going to make commitments to this Alaska Pipeline Project, nobody's going to make commitments to the Conoco-BP Denali project, and nobody's going to make commitments to the Mackenzie project. Nobody who is not corrupt and in bed with the companies who stand most to benefit, that is.|
TransCanada spokesman James Millar told The Associated Press on Tuesday that officials are pleased with negotiations with gas producers so far, but the process is complicated and takes time. In spite of an official’s earlier stated target of having precedent agreements by year’s end, he said TransCanada’s concern is less on an arbitrary clock and more on ensuring that negotiations are undertaken prudently.
He said it’s too early to say whether there will be a need for another open season, during which gas producers are courted and shipping commitments are sought.
“We remain optimistic,” Millar said.
Negotiations focused on resolving conditions within the company’s control have been under way since July, when TransCanada ended a three-month open season.
TransCanada has not identified the bidders on the project, saying only that it received multiple bids from “major industry players and others.”
TransCanada, based in Alberta, Canada, is working with Exxon Mobil Corp. to advance a pipeline project that would bring gas from Alaska’s harsh, prodigious North Slope to market. It’s doing so with a pledge of up to $500 million in state aid, as part of its exclusive license under the Alaska Gasline Inducement Act — a legacy initiative of former Gov. Sarah Palin.
The project faces competition from Denali-The Alaska Gas Pipeline, a joint effort of BP and Conoco Phillips that is moving ahead without state support. Denali has said it hopes to complete negotiations early next year. BP, Conoco and Exxon own rights to most of the North Slope’s known natural gas reserves.
Larry Persily, the federal coordinator for Alaska natural gas pipeline projects, said people shouldn’t read anything into it if TransCanada misses its self-imposed deadline for agreements. He said he wouldn’t be surprised if Denali’s deals came later than expected, too.
Persily said agreements are big deals given that once shippers sign them, they’re essentially assuming part of future development costs. Proposed projects have ranged in price from $20 billion to $41 billion.
“If a year from now they still don’t have precedent agreements, that’s bad,” he said. “It’s good they’re still working on it.”
It’s widely believed that only one pipeline will be built, if one gets built at all. Oil and gas company officials have said they’d seek long-term fiscal certainty from the state, a term outside the control of the pipeline companies and one that Gov. Sean Parnell’s administration has said they’d have to demonstrate a clear need for.
Millar said the message the company’s getting from Parnell is that he still has confidence in the Inducement Act but that officials want to talk with his new commissioners on the issue.
Parnell, who took over for Palin when she quit last year and was sworn in for his first full term Monday, sees the competition as a good thing and said he’s committed to seeing that a pipeline gets filled.