A group led by Berkshire Hathaway’s MidAmerican Energy Holdings Co. said Thursday it withdrew its application with the state of Alaska to build a $6.3 billion Alaska portion of a pipeline to deliver North Slope natural gas to the Lower 48 states. The news was the latest blow to the more than 30-year effort to build a long-line Alaska gas transportation system.
The Alaska Gas Transmission Co. (AGTC) group said it pulled out of the 4.5 Bcf/d pipeline project because of Alaska’s failure to agree to terms that would have allowed AGTC and its partners to move forward on an accelerated schedule with an exclusive five-year development period.
When the group filed its application in January, “we requested a business partnership with Alaska that would have aligned us with the state on an exclusive basis in recognition of MidAmerican’s willingness to fund development of an independent pipeline and to do so on an accelerated basis,” said MidAmerican Chairman David Sokol.
“We are extremely disappointed the state of Alaska rejected this approach, which we had clearly discussed with Gov. [Frank] Murkowski before filing our application. Our inability to obtain an agreement does not diminish our continuing view that the Alaska gas pipeline is extremely important to natural gas markets in the Lower 48, and passage of federal energy legislation supportive of the project is essential,” he said.
The withdrawal of the application was supported by AGTC’s other partners — CIRI, an Alaska Native corporation; and Pacific Star Energy, a consortium including Alaska Native corporations, said Des Moines, IA-based MidAmerican, the majority partner in the group.
AGTC noted that it officially suspended negotiations with the state of Alaska on Monday after it “became evident a contract resolution would not be reached.”
The AGTC application called for the construction of a 745-mile, 48-inch diameter pipeline from the North Slope area near Prudhoe Bay southward to the Alaska Yukon border, placing the line in service by the end of 2010. The Alaska portion of the line would have connected with a new, companion pipeline to be built in Canada either by TransCanada PipeLines or others, which would have provided a gateway for Alaska gas to be delivered to virtually every market center in Canada and the Lower 48 states.
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