Just when you thought Florida was the place to be this springfor pipeline construction, the ice is melting and activity isstarting to blossom on the Northern frontier -think Alaska andthe Northwest Territories.

“We certainly think Canada, particularly the frontier areas ofCanada, will be very critical in providing a portion of the supplyrequired to serve a market demand in excess of 30 Tcf,” CubaWadlington, CEO of the Williams pipeline unit, told NGI. “Therewill be significant opportunities, and we intend to participate inthose opportunities…..It’s on our radar screen,” Wadlington’sremarks came in response to a question about new Canadianconstruction. And while he doesn’t expect to make an announcementnext week “we would hope not long after that.”

The Williams’ executive’s remarks are the latest in a string ofdevelopments over the last few months relating to far-out reservesnow that $3.00 gas and 30 Tcf are the driving numbers.

The U.S. ambassador to Canada started the discussion with amid-winter visit to the developing Fort Liard area in the NorthwestTerritories. (See story, this issue) Then Federal Energy RegulatoryCommission Chairman James Hoecker chimed in with a speech lastmonth extolling the virtues of Alaskan gas, in particular thenever-completed northern portion of the Alaska Natural GasTransportation System (ANGTS). (See NGI, March 20) Also, recently anew group has been pushing an ANGTS alternative that would includeboth the original Prudhoe Bay Alaska target and the Fort Liardarea. (See NGI, Jan. 24)

While TransCanada PipeLines has said it expects to see somedecline in throughput with the start-up of the new AlliancePipeline this coming winter, the primary Canadian pipes fromwestern Canada into the Midwest — Alliance, TransCanada andNorthern Border — will all have to run “at substantially highcapacity” to meet the 30 Tcf market, Wadlington said. He pointedout that new pipelines typically do not run full at the outset.”It’s very difficult to have a pipeline scheduled to be builtsimultaneously with the market coming onstream.” If you plan itright “demand catches up with capacity. You have to make a decisionto go out and build a pipeline and get it in place.” Wadlingtonpointed out that Northern Border and Kern River both started outunderutilized, but both were soon running full.

“As we have been throughout the nineties, we are very, very highon the North American market. Williams is the only major pipelinegroup which has stayed in North America and not gone outprospecting around the world,” Wadlington said. “We firmly believenatural gas is the fuel of this century.”

Wadlington did not reveal Williams’ plans, but the company,through its northwestern pipeline subsidiaries and its interest inNorthern Border Pipeline, has been involved in the past in theANGTS project which was designed, certificated and signed byPresident Carter in the late 70s to send gas from Prudhoe Bay southto Canada and the lower 48. Only the two southern legs of theproject – Pacific Gas Transmission and Northern Border – werecompleted. Foothills Pipelines, the Canadian partner in the ANGSTproject, continues to push for construction north to Alaska.

The project would tap the 3 Tcf/year of gas currently beingreinjected into the Alaskan Prudhoe Bay oil fields now that theneed for re-injection is declining as oil reserves are tapped out.There are some other alternatives, however.

A project to carry North Slope gas to the Alaskan coast forliquefaction and export to the Pacific Rim also has beencertificated and has the support of Alaskan interests. One of thosesupporters is Senate Energy Committee Chairman Frank Murkowski(R-AK), who was in Taiwan two weeks ago to talk about overseasinvestment in the project. Several Alaska municipalities havereceived a favorable Internal Revenue Service opinion on a proposalto offer tax-free bonds to help finance the LNG project. Aspokesman said that would knock the pricetag to between $8 to $10billion from $13 billion.

Meanwhile, a Murkowski aide suggested that since the ANGTScertificate is more than 20 years old its environmental impactstatement is “stale” and probably would need to be reviewed. Healso pointed out that Exxon, a major interest holder in the Alaskangas, has been experimenting with a gas to liquids process, andmight well be more interested in holding onto the gas reserves withan eye to eventually making up shortfalls in oil shipments souththrough the existing crude oil line with gas liquids.

Ellen Beswick

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.