An Alaskan oil and gas official said Tuesday that the state would welcome MidAmerican Energy Holdings Co. back to the table to construct a natural gas pipeline from the North Slope to the Lower 48. The Berkshire Hathaway subsidiary last month withdrew its application to build a $6.3 billion pipeline because it said the state did not agree to allow an exclusive five-year development period (see Daily GPI, March 26).

Mark D. Myers, director of the Alaska Department of Natural Resources Division of Oil and Gas, made the comments at the Ziff Energy Group’s North American Gas Strategies Conference in Houston. The state has been trying to secure a pipeline operator to take on project, which has been mired in regulatory and stakeholder delay for years.

This week, TransCanada, which also has been working on a Canadian pipe from the Mackenzie Delta, signed a memorandum of understanding with the state of Alaska, in which the pipeline operator committed to file an application under the state’s Stranded Gas Development Act (see related story). However, Myers said, “there’s still lots of negotiation going on,” and “still lots of ideas floating around.” But unless another group steps up, TransCanada would bring “value to the project.” Alaska regulators want to be involved as much as possible in building the pipeline, Myers said.

Myers said Alaska wants to focus on the “upside,” adding that the project would have a “major significance for energy policy” in the future. While the state has long been known for its oil reserves, Myers said that in the past year, several large and small independents have begun looking for gas. Along with its substantial gas reserves, Myers said the state also holds a “huge potential” for coalbed methane production because the region has about half of the nation’s coal deposits.

“Up until now, gas has been a hazard,” Myers said. “It’s not something we’ve wanted to find. It has been a negative until this point in time.” However, he said that the state is “seeing a trend toward large independents, like Kerr-McGee, Anadarko…coming in and drilling for gas. We see some of the same independents and Burlington Resources, and PetroCanada, with leases in the south. There are a lot of large gas producers involved in Alaska. There’s been a tremendous change of interest by pipelines and producers.”

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