TransCanada PipeLines Ltd., disappointed but refusing to be discouraged after decades of trying, declared itself still ready to collaborate with any credible new contender to build the American half of the Alaska natural gas megaproject after Warren Buffett’s Berkshire Hathaway withdrew its $6.4-billion entry (see Daily GPI, March 26).

“We continue to support the project,” TransCanada spokesman Kurt Kadatz said following the retreat by the Alaska Gas Transmission Co. subsidiary of Berkshire affiliate MidAmerican Energy Holdings Co. “We stand ready to work with any credible partner in Alaska that recognizes our entitlement to build the Canadian section.”

MidAmerican balked after the Alaska government refused to award the company a contract for an exclusive five-year development period. The company insisted on sole partner status during the development phase because it expected to spend up to $100 million on permitting, environmental studies, commercializing the project, placing orders for materials, and working to define the tariff for the pipeline.

The best the Alaska government came up with was an offer of “most favored nation” status, which would bind the state to offer MidAmerican benefits equal to those accorded any other prospective pipeline backer.

Kadatz said TransCanada continues to support the Alaska government’s efforts to advance the pipeline plan. As owner of Foothills Pipe Lines Ltd., TransCanada is heir to 1970s treaties and regulatory approvals covering the Canadian portion of the international gas megaproject.

TransCanada agreed to co-operate when MidAmerican-Alaska Gas launched its proposal in January. TransCanada predicted the 1,000-mile Canadian leg in the project could be built for $5-$6 billion and fill vacant capacity developing on its own system as Alberta gas fields age and their output drops.

In a recent interview, TransCanada president Hal Kvisle pledged to go to bat for the Alaska project in his second role as 2004 chairman of the Interstate Natural Gas Association of America, whose members include the major Canadian gas transporters.

Kvisle said that as INGAA chairman, he will seek approval in Washington for a formula intended to break the Alaska logjam by ending the pipeline project’s reliance on producers BP, ConocoPhillips and ExxonMobil to finance it. Kvisle hopes to persuade U.S. authorities, including the Federal Energy Regulatory Commission, to let gas distribution companies book long-range capacity on an Alaskan line and pass on the costs of the transportation contracts to consumers as the price of supply security.

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