No shippers for new natural gas line

Posted: Wednesday, January 19, 2011

ANCHORAGE — TransCanada Corp. is moving forward with plans for a pipeline to carry North Slope natural gas to the North American pipeline network in Alberta, although it missed a goal of having signed agreements from shippers by Christmas, the Anchorage Daily News reported Tuesday.

“Alaskans should look at that positively, that we are advancing on all fronts, but we haven’t been successful as yet in obtaining the customers we want — we’re still working hard to achieve that,” said Tony Palmer, vice president of Alaska development.

“We did set out a target, and sometimes you achieve it and sometimes it takes you a little bit longer,” he said from his office in Calgary. “This is a very large and complex project.”

The agreements are necessary for the project to win approval from the Federal Energy Regulatory Commission. TransCanada has until October 2012 to file its application with the commission. Meanwhile, TransCanada is working on studies and documents it needs for the application.

The state of Alaska has agreed to spend up to $500 million to help TransCanada, which has a state license with its partner Exxon Mobil. The state has already paid nearly $37 million and anticipates spending another $100 million by July. The governor is asking the Legislature to set aside $160 million for 2012.

A competing pipeline proposal, the Denali project of Conoco Phillips and BP, is progressing without state subsidies. It said it hoped to have agreements with shippers by the end of March.

TransCanada’s 48-inch diameter pipeline is estimated to cost up to $41 billion. An alternative plan to build a pipeline to a gas liquification plant at Valdez would cost up to $26 billion.

The Legislature also ordered a study last year of another possible pipeline, the so-called “bullet line.” The 24-inch diameter line would carry North Slope natural gas to customers at Fairbanks and Cook Inlet communities. A report on the feasibility of that pipeline, estimated to cost $5 billion, is due by July.

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