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Palin: 'Closer Than We've Ever Been' to Gasline

September 1, 2008
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Alaska Gov. Sarah Palin last Wednesday signed House Bill 3001, authorizing the state to award a license allowing TransCanada Alaska to start developing a 1,715-mile natural gas pipeline from a treatment plant at Prudhoe Bay to the Alberta Hub in Canada.

"After dreaming of a natural gas pipeline for more than 30 years, Alaskans have now created the framework for the project to advance," Palin said. "This legislation brings us closer than we've ever been to building a gas pipeline and finally accessing our gas that has been languishing for so many decades on the North Slope."

TransCanada Corp. has constructed many gas pipelines and now operates more than 36,000 miles of gas pipelines in North America, the governor pointed out. Her comments did not include mention of TransCanada's competitor to build the gasline, a producer group known as Denali (see NGI, Aug. 11). That project is backed by BP and ConocoPhillips, and at one point there were rumblings that Russia's Gazprom might want to get involved; however, talks on that appear to have stalled.

"From our perspective there hasn't been any further discussion on this since that was announced as something of interest to Gazprom," said ConocoPhillips CEO James Mulva, as reported by Bloomberg.

TransCanada Vice President Tony Palmer last Wednesday thanked the state for its cooperation with the company. "Our company has started field work on the project in order to meet our target date for completing the initial open season within two years." TransCanada has authorized aerial photography, engineering work and environmental gap analysis in support of the open season project. The AGIA license is to be issued in 90 days.

Palin, who Republican presidential candidate John McCain on Friday named his running mate, recently signed an executive order that is intended to set in motion work on a liquefied natural gas (LNG) project that would liquefy gas from the state's North Slope for tanker export to international markets. Any such project would be dependent upon the development of a gas pipeline to tap the North Slope reserves.

"An LNG project would focus on liquefaction facilities and facilitating agreements between LNG buyers and natural gas producers, and could also include gas conditioning facilities on the North Slope, pipeline transportation from the mainline to liquefaction, and fractionation facilities at tidewater, as well as the liquefaction facilities," the order signed by Palin states.

The state's Department of Natural Resources and Department of Revenue have been directed to to work with any organization or entity committed to commercializing Alaska's North Slope natural gas.

"This solidifies our commitment to facilitating an LNG project that is a product of market interest," Palin said. "By committing both project capital and natural gas resources to a pipeline that would transport North Slope natural gas to tidewater, an LNG project can remain an integral element of the state's effort to deliver Alaska's gas to market."

The two state departments are to provide permitting coordination, fiscal and economic analysis and facilitation of meetings with federal agencies.

To appease LNG plant proponents, Palin's gasline team had said it would include consideration of an LNG option in its deliberations on the TransCanada gasline proposal.

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