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Pipeline Entities Agree to Jointly Pursue Trans-Alaska Gasline

The Alaska Gasline Port Authority (AGPA) and the Alaska Natural Gas Development Authority (ANGDA) have shaken hands on an agreement to cooperate in their efforts to build a "All-Alaska" natural gas pipeline. However, the memorandum of understanding (MOU) signed earlier this month holds no guarantees that the long-anticipated gas line eventually will transport gas to Lower 48 markets.

Alaska voters created the AGPA in 1999 to build an 800-mile gasline to run parallel to the Trans-Alaska Oil Pipeline across the state. The AGPA, a consortium of Fairbanks, Valdez and North Slope governments, already holds rights of way and permits to build the pipe. It also was charged with building the liquefaction/fractionation, storage and unloading facilities in Valdez to produce liquefied natural gas (LNG). The ANGDA, voter-approved four years ago, was mandated by the Alaska Legislature to ensure the distribution of natural gas and propane within the state, and it focuses on in-state gas needs, which include pipe rights of way and capacity issues.

Former Gov. Frank Murkowski spurned the AGPA's proposed LNG project to privately negotiate with the state-based subsidiaries of the three major North Slope producers: BP plc, ExxonMobil and ConocoPhillips (see Daily GPI, May 9, 2006). The talks ultimately stalled last year when Murkowski lost in the Republican primary to Sarah Palin, who ultimately won the statewide election in November (see Daily GPI, Nov. 9, 2006).

Palin, who took office last month, began meeting almost immediately with stakeholder groups involved in some aspect of the proposed pipeline, and she said she is willing to consider all comers in moving North Slope gas to market (see Daily GPI, Dec. 8, 2006). The "scenarios are endless," she said, in how to move the state's gas to market.

Harold Heinze, who directs the ANGDA, said the formal MOU will allow two entities to share confidential information on proposed designs and cost estimates.

"We can work together without this [MOU], but what it does is allow that conversation to be in a much higher level of detail," said Heinze. He noted that the MOU does not bind either party to a particular project nor exclude agreements with other entities.

Palin, in an e-mail to The Associated Press, said she applauded "any efforts by any potential applicants to join forces, including the three primary North Slope producers, in whatever manner they deem appropriate to eventually submit the most attractive and beneficial proposal for the administration's consideration under the new law."

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