TransCanada gets ‘multiple bids’ from entities interested in Alaska line to ship natural gas
By Becky Bohrer, APFriday, July 30, 2010
TransCanada: ‘Multiple bids’ for Alaska gas line
JUNEAU, Alaska — TransCanada Corp. has received “multiple bids from “major industry players and others” to use its proposed pipeline to transport natural gas from Alaska’s North Slope to market, a company official said Friday.
Tony Palmer, TransCanada’s vice president of Alaska development, said he’s encouraged about the line’s prospects moving forward as long as “key conditions” are met.
He didn’t specify what those were but said the next step would be for TransCanada to work with potential customers to try to resolve those issues in the months ahead.
It was widely assumed that any bids received would have conditions. For example, oil and gas company officials have previously said they’d be seeking long-term fiscal certainty from the state — a term that would be out of TransCanada’s control and likely to stir political debate.
TransCanada ended its 90-day process of seeking shipping commitments for a proposed line Friday and released few details about the bids, as expected. Palmer had cited competition as a reason for the secrecy. Denali-The Alaska Gas Pipeline, a joint venture of BP PLC and ConocoPhillips, began its own open season a few weeks ago.
The stakes are high and the interest is intense: A gas pipeline has been held out for years as important to Alaska’s long-term economic future, because the production of oil, which is largely responsible for keeping the state running, continues to decline.
The drama and the political parlor game of “will it or won’t it get built” is playing against the backdrop of a campaign for governor, and the gas line has become a leading issue in the GOP race.
Only one project is expected to go forward — if one advances at all.
TransCanada, which is working with Exxon Mobil Corp. to advance its plan, successfully bid for an exclusive state pipeline license and the promise of a $500 million reimbursement under the Alaska Gasline Inducement Act championed by then-Gov. Sarah Palin. The Denali project is getting no such state support and has said it doesn’t agree with all the act’s terms.
TransCanada and Denali have put forth plans to deliver about 4.5 billion cubic feet of gas per day to North American markets by larger lines to Canada; each has goals of being in service by around 2020. Denali has estimated its project cost at $35 billion, while TransCanada has put its figure at $32 billion to $41 billion.
TransCanada also has offered a shorter, cheaper option: a $20 billion to $26 billion line that would lead to a liquefied natural gas facility that could export fuel by ship. Denali spokesman Dave MacDowell has said Denali would consider such an option if potential customers wanted it.
MacDowell said Friday there have been no negotiations or merger talks between Denali and TransCanada, and the results of TransCanada’s open season “won’t change what we’re doing.”
