Alaska officials Friday signed a license agreement that gives TransCanada Alaska LLC (TC Alaska) and affiliate Foothills Pipe Lines Ltd. the concession to construct a pipeline to tap the state’s North Slope gas reserves.

TC Alaska proposes to construct a 4.5 Bcf/d, 48-inch diameter pipeline running 1,715 miles from a gas treatment plant at Prudhoe Bay on the North Slope to the Alberta Hub in Canada. The Alaska section would be approximately 750 miles with six compressor stations at start-up and five delivery points in Alaska.

Gov. Sarah Palin joined Natural Resources Commissioner Tom Irwin and Revenue Commissioner Patrick Galvin as the Alaska Gasline Inducement Act (AGIA) license was signed in Fairbanks. “This year we have seen significant resource exploration and development in Alaska,” said Irwin.

With the signing of the license agreement TC Alaska and Foothills have access to $500 million in state money to help pay for development of the project to an open season and then to licensing by the Federal Energy Regulatory Commission and Canada’s National Energy Board. TC Alaska and Foothills were awarded the gasline concession this past summer (see Daily GPI, Aug. 4).

“An Alaska pipeline will bring huge economic benefits to the state of Alaska, its people and its producers,” said Hal Kvisle, CEO of TransCanada Corp., parent of TC Alaska and Foothills.

The step forward for the long-awaited Alaska gasline came on the same day that regulators in Canada said a report on the Mackenzie Gas Project (MGP) has been delayed another year, further hindering the beleaguered project (see Daily GPI, Dec 8). MGP would transport up to 1.9 Bcf/d about 750 miles along the Mackenzie River Valley to Alberta. There it would link to pipes that would carry gas to markets in Canada and the Lower 48.

During Palin’s bid for the vice presidency her progress in moving the Alaska gasline forward was widely touted, with some reports suggesting that the project is a done deal. That, however, is not the case (see Daily GPI, Oct. 27). It also remains to be seen whether producers will sign on to the TransCanada project (see Daily GPI, Oct. 29) or stick with their own pipeline proposal, which is called Denali and is backed by BP and ConocoPhillips (see Daily GPI, Aug. 5).

Meanwhile, ExxonMobil, the third member of the state’s producer triumvirate, continues to spar with Alaska over leases to drill at the Point Thomson oil and gas field, which the state has revoked due to decades of inactivity (see Daily GPI, Aug. 7). ExxonMobil and others have argued that Point Thomson gas production is necessary to move a gasline project forward.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.