TransCanada Co. began appearances before legislative committees Monday, after having filed with the Federal Energy Regulatory Commission on Friday to begin the "open season" process for building a natural gas pipeline.
Tony Palmer, the Calgary, Alberta-based company's vice president for Alaska development, appeared before the Resources committees in the House of Representatives and Senate.
TransCanada has an exclusive Alaska "license" to develop a state-sponsored pipeline, awarded in 2008 under former Gov. Sarah Palin.
Palmer tried to shoot down lingering concerns from the pipeline's critics, some who favor another project, namely the ConocoPhillips Co. and BP p.l.c. pipeline project known as Denali.
Palmer said that despite concerns that gas prices outside Alaska are now at historically low levels, that is not expected to continue in future decades while the pipeline is in operation.
Palmer presented two pipeline options: One running from Prudhoe Bay to Valdez and the other from Prudhoe Bay to Alberta, Canada. The pipeline to Valdez would cost more than $20 billion, and the one to Alberta would range between $32 billion and $41 billion.
Regardless of which the state chooses, AGIA will be successful, he said.
"Both Alberta and Valdez options are technically and commercially viable based on current project costs and natural gas/oil forecasts," he said.
Under the open season, TransCanada will spend 90 days seeking commitments of natural gas from suppliers on the North Slope.
A number of those have been resolved, he said, while the company continues to work on others.
Concerns that some of TransCanada's former partners on an earlier pipeline might re-emerge and threaten the current project have now been allayed, he said.
All of those previous claims have been removed at no cost to TransCanada," Palmer said. "That has been completely resolved."
And TransCanada already has some advantages that other pipeline options don't.
Explorers looking for oil have found a great deal of natural gas, in excess of 30 trillion cubic feet ,to fuel the pipeline in its early years before more is found, he said. The proposed pipeline to Alberta would carry 4.5 billion cubic feet of gas per day. The shorter pipeline to Valdez would carry 3 billion cubic feet in comparison. Palmer said the project timeline would be about the same, regardless of which is built.
"You've got a massive amount of proven gas that's available today," Palmer said, describing that as a "big advantage."
While critics, and some supporters, have said that all the parties involved in Alaska natural gas development have to reach "alignment," Palmer said that three of the five parties are now on the same page.
Pipeline company TransCanada, the state of Alaska, and Exxon Mobil Corp., one of the state's three gas lease holders, are working together, he said.
Two of the other key players, BP and ConocoPhillips, are doing their own project.
Palmer noted that even though ExxonMobil is partnered with TransCanada in building the pipeline, that doesn't mean its gas exploration and production arm has committed any gas.
There is a "firewall" within the company between the two, he said, but ExxonMobil's participation brings big advantages to the TransCanada effort.
ExxonMobil is the world's expert in building the multi-billion dollar gas treatment plant the project needs, and will and is also one of the world's most financially strong companies, Palmer said.
Palmer presented no testimony that Exxon's participation in developing the pipeline would mean that its exploration and production unit would commit gas to the pipeline in the open season later this year.
Contact reporter Pat Forgey at 586-4816 or email@example.com.
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