TransCanada Corp. last week settled some old business that could have been a stumbling block to development of a long-haul pipeline to carry Alaska North Slope natural gas to Lower 48 markets.

On Friday the Federal Energy Regulatory Commission recognized the surrender of a certificate issued in 1977 to TransCanada subsidiary Alaskan Northwest Natural Gas Transportation Co. In the opinion of some, that certificate for a gasline project that never got built could have created a $9 billion liability to the subsidiary’s former partners to be borne by future shippers on the Lower 48 pipeline.

While it was lobbying last year for the state concession to build the pipeline under the state’s Alaska Gasline Inducement Act process, TransCanada said the so-called “withdrawn partners liability” was a nonissue. TransCanada’s Alaska vice president, Tony Palmer, said, “There’s no $9 billion liability today because there’s no [pipeline] asset today.” Palmer said even if the company did face a liability, the cost of that liability would not be borne by shippers on any gasline it develops (see Daily GPI, March 18, 2008; Jan. 28, 2008).

Even if old legal business is not going to do in the company’s pipeline plans, current market circumstances still could. Weak gas prices and burgeoning Lower 48 gas production, as well as the potential for stepped-up imports of liquefied natural gas, all are causing some to question the economics of a Lower 48 gasline (see Daily GPI, Feb. 6).

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