Though natural gas prices have been sliding in the last few months, plans to construct an Alaskan natural gas pipeline into Canada and the Lower 48 are moving to the fast track, as producers and business groups, eager to move the process forward, push their proposals this month during a two-day hearing in Anchorage.

The Alaska State Legislature’s Joint Committee on Natural Gas Pipelines has scheduled public hearings July 17-18 in Anchorage on the current status of the gas pipelines that would carry Alaska’s abundant energy source to Canada and the Lower 48. Testimony is expected from all of the movers and shakers in the various projects, as the committee attempts to piece together the splintered groups’ long-term plans to move gas south by the end of the decade.

Updates from federal and state government officials are scheduled on construction plans, with representatives from the Federal Energy Regulatory Commission and the Regulatory Commission of Alaska testifying. Both Wilson Condon, commissioner of the Alaska Department of Revenue and Pat Pourchot, commissioner of the Alaska Department of Natural Resources, are scheduled, along with the Minerals Management Service and the Alaska Port Authority.

Then over both days, the hearings will get down to the real deal, the producers’ side of the business, with Phillips Alaska, BP Exploration and Yukon Pacific Corp. meeting with the committee, followed by representatives from Foothills Pipe Line and Williams Energy Services. The hearings also leave room for testimony from other stakeholder groups, but all eyes will be on the producers and marketers that will actually make one of the various projects viable.

FERC and Alaska officials are expected to offer an overview of the timing and process of applications in the works and how access to the pipeline by gas producers will be determined. Ed Small, the Canadian representative of Cambridge Energy Research Associates also is expected to testify about the marketplace — CERA was retained by the State of Alaska to advise officials about gas market conditions.

Of special interest to producer groups will be the update over the course of the two-day hearings on the right-of-way pipeline applications. Yukon Pacific has a conditional right-of-way for a pipeline route from the North Slope to a proposed Valdez, AK liquefied natural gas (LNG) gasification plant. Foothills has renewed its right to file an application for a natural gas pipeline from the North Slope to a connection to its Alberta line to the Lower 48. And the Alaska Gas Producers Pipeline Team, which includes the energy heavyweights BP, Phillips Alaska and Exxon Mobil, has begun pre-application work on alternative routes.

The Pipeline Team, composed of three of the largest oil and gas producers in Alaska, is pushing for an overland gas pipeline to the Lower 48 and Canadian markets. The team, said state officials, has been studying several routes, including a Beaufort Sea and Alaska Highway route. Although there were no details on what will be presented, representatives are expected to update officials on progress to date, future plans and what they believe to be the key issues affecting the state.

Beginning this month, the group will spend $75 million to begin a feasibility study that includes scouting a proposed northern over-the-top pipe route to take the gas reserves offshore to the Canadian Arctic then south along the Mackenzie River to the Lower 48. The Beaufort Sea over-the-top route is about 350 miles shorter than the main alternative, which parallels the trans-Alaska oil pipeline to Fairbanks, AK then along the Alaska Highway.

A sonar study of the Beaufort Sea is scheduled to begin by the end of this month, pending a permit being issued by the National Marine Fisheries Service. With the permit, a pair of survey vessels would scout near the shoreline of the Beaufort Sea, charting the sea floor. While other studies have been done on the Beaufort, it is the first time producers have undertaken the job.

Foothills, the joint venture company formed by TransCanada Pipelines Ltd. and Westcoast Energy, two of Canada’s largest pipeline companies, was originally formed to build the Canadian portions of the Alaska Natural Gas Transportation System (ANGTS). Today, Foothills is the ANGTS operator, and it holds permits and rights-of-way for a gas pipeline along the Alaska Highway through the state and into Canada.

John P. Elwood, Foothills vice president of engineering and operations, said he would be talking about Foothills’ most recent activities supporting the ANGTS project, including discussions with the Producers Pipeline Team, negotiations with “withdrawn partners” and the status of permits and rights-of-way.

Yukon Pacific, poised to begin a LNG project to deliver Alaska North Slope gas to Asian markets, already holds some permits and rights-of-way for its project. The project now is apparently moving into high gear, and Yukon Pacific CEO Jeff Lowenfels intends to talk about cost estimates, including the construction of a spur line from Glenallen to Sutton, AK. He also said he would talk about delivering North Slope gas to U.S. markets through the LNG project.

Another LNG project also will be talked about at the hearings said an Alaska spokesperson, composed of a group led by Phillips Alaska, BP, Foothills and Manibeni Corp. This group wants to develop an economically and commercially viable LNG project for North Slope gas, and has been studying two routes from the North Slope, one to Valdez and the other to Nikiski, AK.

Williams Energy Services also will make its pitch to the committee. It owns and operates a refinery in Alaska, marketing petroleum products throughout the state. Jeff Cook, vice president of external affairs, plans to present plans on in-state processing of Alaska’s North Slope gas.

And the outcome of the hearings? Although for the most part, the hearings are a look-and-see step by state officials, it also is expected to force producers to show a little bit of the cards they are holding. Pipeline Team spokesman Curtis Thayer said that the energy companies aren’t paying any attention to gas prices. He said that all of the producers are making their own forecasts, and when they’ve each completed their study, each company will then evaluate an Alaskan pipeline option independently.

One worry is that the falling prices could kill the overland pipeline to the Lower 48 and boost the Yukon Pacific goal of liquefying gas for market. Asian buyers, said CEO Lowenfels, purchase gas on long-term contracts that are less volatile than U.S. markets. He remains skeptical, he said, about the Lower 48 pipeline being completed any time soon because prices won’t be high enough.

But impartial observers think the pipeline is a go — especially the over-the-top route. Paul Mortensen, director of natural gas supply for the Canadian Energy Research Institute, said Friday that CERI advocated a natural gas pipeline before prices shot up last year. He said the CERI report, which analyzed the cost and benefits of the choices available to transport natural gas from Canada’s north to southern markets still stands.

“We advocated the over-the-top route before the price run-ups,” Mortensen said. “It’s the most economical, and I see nothing standing in the way of it being built.” He said CERI projects the pipe ramping up between 2007 and 2010.

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