Gas line objectives make room for smaller players

Posted: Tuesday, November 27, 2007

ANCHORAGE - The deadline for applications to build a natural gas pipeline in Alaska is Friday and so far two commitments seem certain - but they aren't from North Slope leaseholders Exxon Mobil Corp., BP PLC and ConocoPhillips.

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The Alaska Natural Gas Development Authority - or ANGDA - recently said it plans to weigh in with its own proposal for a spur line to connect with a main line.

Unlike the major oil or pipeline companies, the authority won't be proposing a multibillion-dollar pipeline across Alaska's Interior through Canada and into Midwest markets.

This project would hook into the main pipe at either Delta Junction or Glennallen and carry gas southwest to Cook Inlet to serve the state's main population center.

The spur could be a lifeline for Southcentral, siphoning off some of the enormous outbound gas shipments to heat and light local homes and businesses, said Harold Heinze, the authority's chief executive.

"We looked for where we could contribute," Heinze said. "The spur line became a very logical focus."

Earlier this summer, pipeline company MidAmerican said it would submit an application with two undisclosed partners.

The state has tried unsuccessfully for years to get a pipeline project going.

Last year, former Gov. Frank Murkowski struck a fiscal terms agreement with the North Slope leaseholders, but that didn't guarantee a project; it simply established tax terms and other incentives which the Legislature found too generous and never voted on it.

This year, Gov. Sarah Palin made the gas line a priority and opted to make the project more inclusive so smaller players, such as ANGDA, could bring a project to the table.

ANGDA is the product of voters' frustration with the lack of progress toward a North Slope gas line. The public voted to create the authority in 2002.

While Palin's approach was designed to stimulate competition among prospective gas line builders, Heinze said the spur is more complementary than competitive.

"It basically can be stapled to anybody's work," he said. "We're not competing with anybody."

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