Canada’s Foothills Pipe Lines Ltd. remains on track to build theAlaska Natural Gas Transportation System (ANGTS) despite a callthis week to change direction by a new kid on the block who’sattempting to derail the 20-year-old plan in favor of new one.

Foothills, which has been in the North Slope mix as pipelinedesigner for its owners, TransCanada and Westcoast, hasn’t beencontacted lately by anyone from Arctic Resources Co., but companyofficials are well aware of the Houston-based upstart’s plans tobuild a gas pipeline along an alternate route. And there’s nohesitation when asked if Arctic might have a better plan.

“It puzzles me why people are turning away from a plan that wasdesigned more than 20 years ago,” said Foothills’ John Ellwood,vice president of engineering and operations. “They think it was abad decision. It wasn’t. It was a good decision then, and it’s agood decision now.”

The “decision” focuses on what route the massive pipeline wouldtake. For more than two decades, Canadian and U.S. governmentofficials have agreed upon a route that would transport North Slopegas from Prudhoe Bay south along the Alaskan Highway, across theYukon. Northern British Columbia and Alberta, and finally to aterminal at the U.S. border. And it’s gotten more than approval.The southern portion of the route, which extends from Alberta intothe United States, is already completed, and includes Foothills andNorthern Border pipeline. Only the northern portion remains to bebuilt.

But the dream has been delayed by a variety of problems, not theleast of which was the flat natural gas prices that discouragedproducers from wanting to spend exploration and development moneyin the largely untapped region.

That was yesterday. Today, it seems, nearly anyone who has agood idea of how to move the natural gas reserves that lie dormantin the Canadian wilderness is stepping forward.

Tuesday, Arctic Resources Co. began its big push towardrespectability and recognition, officially unveiling its alternateroute to transport natural gas (see Daily GPI, June 14). Arctic Resources president,Forrest Hoglund, said that the only way for a pipeline to finally bebuild will be with a consensus of producers, pipeline companies,aboriginal tribes and government officials. But Foothills hasn’t heardfrom the consensus builder for months.

Ellwood said that his company had some discussions with thesix-month-old Arctic when it was being formed a few months ago, buthas had no contact since.

“We continue to be proponents of ANGTS,” said Ellwood. “We willcontinue to work to advance that plan. We know the North Slopeproducers are taking a look at Arctic’s plans, but our work iscontinuing. We believe the ANGTS route has advantages. The reasonsthe ANGTS route was selected are still valid today. The permits arein place, the regulatory work is completed. There’s not a whole lotof sense in doing something different at this point.”

What Arctic is doing is spreading its plan around to all of themajor producers and pipeline companies with interests in the NorthSlope to see if they will consider it instead of the ANGTS route.Among those producers taking a long look is BP Amoco Canada, thecountry’s largest natural gas producer. It has had talks withseveral pipeline companies, but hasn’t announced which plan itlikes best.

At a press conference at the World Petroleum Congress in Calgarythis week, BP Amoco’s Sir John Browne said his company mightconsider taking an ownership role in a new natural gas pipeline asit eyes development in the Mackenzie Delta, Beaufort Sea andAlaska. Said Browne: “Our cost of capital is such that if we findthe right returns on a pipeline and are permitted to own it, we’dcertainly consider doing that. Pipelines are not something that weshy away from as a matter of principle.”

In fact, BP Amoco announced this week that it plans tostrengthen its position in Canada’s far north as it works to be atop dog in natural gas development in the region. In the NorthwestTerritories and the Yukon, BP Amoco holds 89,000 acres of discoverylicenses and producing licenses. It also has another 155,700 acresof discovery licenses and 617,800 acres of exploration licenses inthe Beaufort Sea, currently under an E&P moratorium.

“We want to maintain our good position in Canada, and if there’sgood business to be done, we’ll do that in the north,” Browne saidin Calgary.

He also predicted even though it would be “well beyond thisyear” before development decisions are made, he said that within adecade, a pipeline from the North Slope would be reality.

That, too, is what Foothills’ Ellwood believes. The only thinghe says the ANGTS route proponents are waiting on at this point isa “convergence of interests” to make the project happen.

“Everybody agrees on that, both ANGTS and Arctic,” said Ellwood.”We’re willing to talk and eager to talk with anyone who wants totalk.”

Among the advantages for the ANGTS route, said Ellwood, is thatit follows an established transportation corridor, despite themountain ranges, and with the transportation corridor, the builderswill be near materials, and as important, will not disturb greenspace.

“We would not be building in an undeveloped area. We’ve got costadvantages and environmental benefits. Those are the mainadvantages,” he said.

And, despite a push for another route, it could take up to threeyears for permits and regulatory approvals to be issued – permitsand approvals that the ANGTS project already has.

“I’m comfortable that we could get this thing built in fiveyears and have natural gas flowing into Chicago,” said Ellwood. “Weknow enough about the route, we’ve got a good operation in Alaskafor a conventional pipeline. We’re confident we could get it donein five years, and maybe even less.”

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