Gas companies begin discussions on pipeline

Posted: Thursday, March 22, 2007

At least one natural gas company unabashedly supports Gov. Sarah Palin's plan to build a natural gas pipeline and ultimately transport trillions of cubic feet of North Slope reserves to market.

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An official from BG Group PLC, a London-based natural gas explorer, producer and shipper, said Wednesday said he likes how the plan stimulates competition and is inclusive.

"It's the right way to go," BG vice president David Keane told The Associated Press.

Palin's plan establishes project criteria energy companies must meet in exchange for inducement incentives from the state to build a pipeline.

It's an open process among numerous groups, unlike last year when former Gov. Frank Murkowski dealt with only the big three North Slope producers.

Keane reiterated the British company's support to a joint hearing of the Senate's resources and House's oil and gas committees.

"Having a solid approach that includes all of the participants is very, very important," he said. "Something like this moves the process forward more properly than what's been done in the past."

BG, which ships the largest percentage of liquefied natural gas to the United States, emerged as new player, having just established itself as an explorer in Alaska with its first North Slope well last month.

Keane met with lawmakers separately throughout the day, then he sat before the group, stunning some of them with this fresh perspective.

Rep. Nancy Dahlstrom, R-Anchorage, said BG's presence speaks well for the prospects of developing Alaska's resources.

"It's the strongest endorsement I've heard so far from anyone in the gas or oil industry," said Dahlstrom, a member of the oil and gas committee. "It comes from a big player and a successful player."

Keane said the company doesn't want to build the pipeline but eventually wants to be among the companies that ships gas in it.

"We want to be able to gain access to pipeline capacity and want to be able to move our gas to market once we find some," Keane said.

BG kicked off industry testimony on the Alaska Gasline Inducement Act, also known as AGIA.

Chevron called AGIA a good first step, but went no further during a four-slide presentation, which stated, "We have some observations, but few hard positions at this time."

Chevron has been producing oil and gas in Alaska for more than 50 years and plans to invest about $170 million this year, company executives said.

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