ConocoPhillips is reassessing how to advance its Alaska North Slope gas pipeline project after its rejection by the state in favor of a competing proposal that is compliant with the Alaska Gasline Inducement Act (AGIA), the company said last week.

The company submitted its non-AGIA compliant proposal on Nov. 30, just before the state revealed applicants under its AGIA process (see NGI, Jan. 14; Dec. 3, 2007). ConocoPhillips said it addressed many of the state's primary objectives specified in AGIA.

"ConocoPhillips remains dedicated to developing Alaska's North Slope gas resources as we re-evaluate the best path forward for advancing this pipeline project," said CEO Jim Mulva.

"Despite the lack of progress with the state of Alaska, as an initial step ConocoPhillips will continue its planning and contracting efforts in preparation for a route reconnaissance and environmental studies starting in June 2008," said Jim Bowles, president of ConocoPhillips Alaska. "It is important that we take advantage of this summer field season and keep this project moving ahead."

Gov. Sarah Palin acknowledged the ConocoPhillips announcement but stood by her determination to move forward with the review of a proposal from TransCanada under the AGIA process (see NGI, Jan. 7).

"We have in front of us an application that was submitted in good faith by the largest pipeline company in North America," Palin said. "It was submitted under the terms we asked for, under the law of the State of Alaska. Those terms ensure three things: 1) that Alaskans benefit from the project; 2) we get objective milestones that let Alaskans measure the progress that's being made; and 3) that Alaska gets an open access pipeline. In short, we need a pipeline that is good for Alaska.

"We have an obligation to conduct a good-faith evaluation of TransCanada's application. That is an obligation to the public, to the Legislature, to ourselves and to TransCanada. In order to evaluate its application in good faith, we cannot permit a negotiation with ConocoPhillips to color the decision-making. We have relayed this to ConocoPhillips."

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