Companies both big and small want to build a natural gas pipeline for Alaska, but a medium-sized one may be in the lead to win the project worth tens of billions of dollars, some observers say.
The $20 billion Alberta, Canada-based company Trans-Canada is big by most measures, but considered only medium-sized by oil industry standards. It is dwarfed in size by two of its competitors also seeking to build the gas line, ConocoPhillips Co. and Sinopec, China's national oil company.
Other applicants for the pipeline include the local government-owned Alaska Gasline Port Authority, newly formed AEnergia LLC.
Sen. Charlie Huggins, R-Wasilla, said one of the crucial decisions facing the state is whether it believes the applicant can pull off a project on the scale that's being proposed. Huggins chairs the Senate Resources Committee, likely to be the first committee in the Senate to review Gov. Sarah Palin's gas line team.
"The size of this project can make a lot of these companies weak-kneed," Huggins said.
Rep. Beth Kerttula, D-Juneau, said her quick initial look at the applicants suggested that TransCanada and its Foothills Pipeline subsidiary had the best chance.
"I think the conventional wisdom is that it is probably TransCanada takes this," Kerttula said.
Among the fundamental decisions facing the gas pipeline team is the pipeline route. The team is headed by Department of Natural Resources Commissioner Tom Irwin and Department of Revenue Commissioner Pat Galvin.
One option is an all-Alaska line to a liquefied natural gas export terminal, likely at Valdez. Such a line could follow the route of the existing trans-Alaska pipeline.
The Alaska Gasline Port Authority, a public entity created by the boroughs of North Slope and Fairbanks and the city of Valdez, are proposing such a line. China's Sinopec is thought to be making a similar proposal, in conjunction with ZPEB, a Chinese oil field services company.
The other route would be through Canada, to bring gas to markets in the U.S. Midwest.
That's what TransCanada is proposing, and what AEnergia LLC is also thought to be proposing.
TransCanada has been working on that route for some time, and says it is in the lead. It already has necessary rights of way in Canada, and applications in Alaska for rights of way needed there, the company said.
"Because of the rights we hold, the work we've done and the relationships we've built over the years, we estimate we have a two- to three-year head start over other proponents," the company said in a written statement.
AEnergia LLC was formed in Alaska by two California men a few weeks before the application deadline.
Petroleum News reported the company's top officers have worked on gas pipeline issues in the past and have long experience in Alaska pipeline issues with other companies.
It is not clear whether AEnergia has adequate resources for such a project, or even to submit a credible application.
The company has no listed phone number in the Sacramento area, where its principals live, and phone messages left with CEO Bill Burkhard's wife provided no additional information.
Pipeline plans discussed in the last legislative session suggested that a pipeline to the Midwest would likely be significantly larger than a liquefied natural gas export pipeline, and could be far more profitable to Alaska.
Because of its additional length, it also likely would be far more expensive.
TransCanada said that it already has an extensive pipeline network in Alberta that it could link to, meaning that its pipeline would only have to cross British Columbia, and not run all the way to Chicago.
"Our large Western Canada gas transmission system offers significant cost savings for the movement of Alaska gas from Northeast BC to North American Markets," said Shela Shapiro, TransCanada spokesperson.
She declined detailed comment on TransCanada's proposal until the Palin administration review was complete and all the plans are released publicly. No deadline for that review has been announced.
ConocoPhillips Co., Alaska's largest oil producer and holder of gas leases in Alaska, also has announced it would like to build a pipeline. It submitted its proposal outside the process outlined in the Alaska Gasline Inducement Act, sponsored by Palin and passed by the Legislature during its last session.
Kerttula said that should mean that ConocoPhillips' application should not be considered.
"If they don't meet AGIA, they shouldn't be accepted," she said.
The Alaska Natural Gas Development Authority submitted a proposal for a gas pipeline to Southcentral for local usage. The proposal was submitted as part of the AGIA process, but does not appear to be intended to meet the AGIA requirements by itself.
ANGDA's proposal would link to a liquefied natural gas line at Glennallen, or a bigger line to the Midwest at Delta Junction, said Harold Heinze, the state-sponsored agency's CEO.
"It's not in competition with anybody," he said. "It could mate up with everybody who put a proposal on the table."
That sounds like it would work with what TransCanada's proposing, Shapiro said.
"We expect that it would be compatible," she said.
Sen. Minority Leader Gene Therriault, R-North Pole, said he doubted the Legislature would be able to address the gas pipeline issue during the regular session, which will be its first under the new 90-day limit approved by the voters in 2006.
"I think we will probably have to take that up in a special session," he said.
"Whether that is immediate or there is a break for some time after the regular session, I don't know" he said.
Kerttula agreed, saying that it was unlikely the governor's recommendations could be done in time for the regular session.
"There wouldn't be enough time to get it at the beginning of the session, and at the end it's too rushed," she said. "It sounds like a special session to me."
Contact Pat Forgey at 523-2250 or firstname.lastname@example.org.
© 2018. All Rights Reserved. | Contact Us