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Producers' Alaska Gasline Bid Cleared for Pre-Filing Review

Backers of the Denali Alaska gasline proposal -- BP and ConocoPhillips -- Wednesday received approval from FERC for the Commission's pre-filing review process, which allows review of the project to begin prior to receipt of the Denali application.

"Because an Alaska natural gas transportation project will likely require multiple field seasons to develop an application, use of the pre-filing process will ensure completion of the environmental impact statement (EIS) within the legislated time frame," wrote J. Mark Robinson, director of the Office of Energy Projects at the Federal Energy Regulatory Commission. "Therefore, I am granting Denali's request and instructing staff to begin working on your proposal."

Denali requested permission to use the pre-filing process earlier this month (see NGI, June 23). Denali is in competition with TransCanada to build a gasline to tap the North Slope's abundant gas reserves and carry them to Alberta and markets in the Lower 48 (see NGI, May 26). The Denali and TransCanada proposals are similar. However, since TransCanada is pursuing a license for its project under the Alaska Gasline Inducement Act (AGIA), it is eligible for a $500 million subsidy. Denali is not pursuing a license or a subsidy. Gov. Sarah Palin's administration has selected TransCanada's project, and lawmakers were called into special session beginning June 3 to consider the TransCanada proposal. They must vote it up or down by Aug. 2.

The Denali camp has said it is proceeding with its project regardless whether TransCanada is awarded a license, in effect putting the two projects in a race.

Robinson wrote that he is waiving filing and timeline requirements because of the size and complexity of the project. "During the pre-filing process, we will work with Denali and all stakeholders to resolve issues as they arise, ensure the collection of necessary information, and develop the appropriate time frames for the submittal of that information and the application," Robinson wrote in his letter to Denali President Bud E. Fackrell.

Denali, which plans to file its application in August 2011, intends to construct a 48- to 52-inch diameter pipeline between the Alaska North Slope and Alberta capable of transporting 4 Bcf/d. The Denali partners also plan to construct a gas treatment plant on the North Slope. Denali also said it will fund a third-party contractor to assist FERC in the development of the EIS. "Our staff will notify Denali when it requires the assistance of a contractor," Robinson wrote.

Denali's letter to FERC and supporting documents are available at www.denali-thealaskagaspipeline.com under "about the project" and "FERC application for pre-filing."

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