Two entities will work together on gas line

Development stages will be handled jointly; no word on construction

Posted: Friday, January 12, 2007

The Alaska Gasline Port Authority and the Alaska Natural Gas Development Authority have signed a formal agreement to work cooperatively on developing a natural gas pipeline.

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Officials with the two voter-approved entities announced Thursday that they signed a memorandum of understanding late last week.

"Alaskans working together is the best approach to developing a natural gas pipeline project," said AGPA chairman Jim Whitaker.

The cooperation does not mean the group will be picked to build a multibillion dollar natural gas pipeline.

Voters created AGPA in 1999 to build a natural gas pipeline through Alaska. The authority says it has secured rights to the right-of-way and permits necessary for a trans-Alaska pipeline from Prudhoe Bay to Valdez and associated liquid natural gas facilities.

Gov. Frank Murkowski snubbed the LNG project in favor of a deal with three major oil producers to build a gas pipeline to Alberta, Canada, and perhaps the Midwest.

His successor, Gov. Sarah Palin, has said she is willing to consider all proposals for getting North Slope gas to market.

ANGDA was authorized by the Legislature to ensure the distribution of natural gas and propane within the state as well as to pursue a natural gas pipeline.

ANGDA director Harold Heinze said Thursday that the formal agreement would allow two entities that share common interests to also share confidential information regarding proposed design and cost estimates.

"We can work together without this MOU, but what it does is allow that conversation to be in a much higher level of detail," Heinze said.

Heinze said the agreement does not bind either entity to a particular project or exclude similar agreements with other entities.

Gov. Sarah Palin said she was glad to see parties cooperating.

"I applaud any efforts by any potential applicants to join forces, including the three primary North Slope producers, in whatever manner they deem appropriate to eventually submit the most attractive and beneficial proposal for the administration's consideration under the new law," Palin said in an e-mail to The Associated Press.

Murkowski limited pipeline negotiations to the three largest North Slope producers, BP PLC, Exxon Mobil and ConocoPhillips.

The $25 billion pipeline is intended to take an estimated 35 trillion cubic feet of natural gas - the largest reserve of natural gas in the United States - from Alaska's North Slope to Midwestern markets.

However, the Legislature never ratified the contract.

Palin took office Dec. 4 and the next day reopened negotiations with anyone interested in building the pipeline. She met with 12 separate groups or companies that week.

She is expected to introduce legislation at the beginning of the session that will guide the process of developing a new gas pipeline deal with oil and gas producers.

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