Enbridge Inc. vowed to take a co-operative approach with all concerned when it stepped forward as the second Canadian contender offering to help build the proposed Alaska natural gas pipeline.
“It’s a project whose timing is coming because the supply and demand conditions are sending a very strong signal,” Enbridge spokesman Jim Rennie said. He emphasized the Enbridge entry is not intended as a rival to the older offer by TransCanada PipeLines Ltd.
“Our action is really nothing to do with competition,” Rennie said. “It’s a huge project. It’s going to take all the parties who can reasonably participate…it may take more than one pipeline company.”
Rennie’s statement echoed TransCanada president Hal Kvisle, who in a recent interview said his firm is not seeking an exclusive franchise in Alaska and is willing to work with any credible partner while preserving its rights established by 1970s treaty and regulatory approvals to lead the Canadian leg of the project.
Like TransCanada, Enbridge will make a formal application for recognition as a potential participant in the megaproject to the state government under its Alaska Stranded Gas Development Act.
Also like TransCanada, Enbridge is expressing interest in participating in the entire development. The Canadians’ estimates peg the cost at about US$12 billion, excluding the expense of any capacity that they will have to add to their established systems to accommodate Alaskan gas. The Canadian companies are interested in participating in the $6-billion northern-most leg 750 miles south across Alaska, the comparably expensive leg 1,000 miles through the Yukon to Alberta, plus expansions to their existing routes to Chicago and California.
Both Canadian companies say conditions on their own pipelines give them strong interests in seeing the Alaska project be built and inject 4.5 Bcf/d into the established grid.
As the dominant partner in the five-year-old Alliance Pipeline from northern British Columbia to Chicago, Rennie said Enbridge sees Alaskan gas as creating opportunities to expand the system. TransCanada says Alaskan gas would fill spare capacity opening up on its system as aging Alberta production declines.
Enbridge said it has already been developing relationships with Alaskan producers ExxonMobil, ConocoPhillips and BP, which have likewise repeatedly said they are willing to hear from credible prospective pipeline partners after their own version of the project ran afoul of excessive costs for them to bear alone.
Enbridge has not yet decided how big a share it wants in the project or how large a financial commitment it is willing to make, Rennie said. “It’s pretty early days,” with no one in the industry suggesting the pipeline will be completed before at least 2010.
“Enbridge will work in collaboration with producers, the state and other governments to determine the right solution as we explore options for delivering Alaska gas in the most economic and effective way to North American consumers,” Enbridge president Patrick Daniel said in a written statement.
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