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Alaska Pipeline on Track for July 2010 Open Season

The TransCanada Alaska Co. LLC (TC Alaska) natural gas pipeline is on target to complete an initial open season by the end of next July, according to a report by Alaska Gasline Inducement Act (AGIA) coordinator Mark Myers.

In a report to the Alaska legislature, Myers said efforts to advance the $26 billion project received "a significant boost" in June when ExxonMobil signed on to TransCanada's plan, which has been ratified by the state (see NGI, June 15). ExxonMobil brought upstream development expertise, the wherewithal to design a gas treatment facility and invaluable technical data of the gasline route, according to Myers, who said ExxonMobil's participation immediately started to pay out though its financial investment into the project.

TC Alaska, the licensee under AGIA -- the pipeline development initiative of former Gov. Sarah Palin -- proposes to construct and operate a 5 Bcf/d, 48-inch diameter line to transport gas from the North Slope to markets in the Lower 48 states via the Alberta Hub. ExxonMobil and TransCanada Corp. first announced plans to launch a 2010 open season for capacity on the proposed 1,700-mile pipeline project in August (see NGI, Aug. 3). The pipeline is targeted to make deliveries into Canada and the Lower 48 by 2018.

The joint efforts of TransCanada and ExxonMobil will result in increased pre-open season spending of $83-150 million, according to Commissioner Tom Irwin of Alaska's Department of Natural Resources.

Myers' full report is available at www.gov.state.ak.us/agia/.

Last month an analysis by a petroleum economist who used to work for the state concluded that AGIA used a flawed financial analysis and overstated the "economic vitality" of the project, making the prospects for construction of an actual pipeline "doubtful" (see NGI, Nov. 2).

Under AGIA, Alaska ultimately awarded a concession to construct a gas pipeline from the North Slope to Alberta, in order to ultimately deliver gas to Lower 48 markets, to TransCanada Corp. (see NGI, Nov. 3, 2008). A competing projected backed by producers BP and ConocoPhillips, called Denali, was not considered under AGIA but is still being pursued by its backers.

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