Producers, TransCanada Expected to Release Gas Pipeline Concept Friday
JUNEAU — Friday, the North Slope producers and TransCanada are expected to release their preliminary concept for a large-diameter natural gas export pipeline.
It’s a deadline set out by Gov. Sean Parnell in his state of the state address in January and will be the latest step in the ongoing attempt to bring the North Slope’s gas to market.
Parnell is asking for the major producers to select a concept for the large-pipeline. The concept should include the size, volume of gas, location of treatment and take-off facilities, as well as other infrastructure elements.
It will be the first good look the public has on the project since it pivoted away from a line through Canada to the Lower 48 last year. The pipeline is expected to focus on export to gas-hungry Asian markets, but little else about its route or capacity is known.
Senate In-State Energy Committee Co-Chairman Sen. Click Bishop, R-Fairbanks, says he’ll pay close attention to the level of detail in the plan.
“I’m hoping that we’re going to have some substance to the process, meaning I’m hoping that the announcement is going to say the majors are aligned in lock step with building a large-diameter pipeline,” he said.
Part of showing that commitment, he says, will be the route. Bishop says a pipeline that ends in Valdez, which is in his district, is the fastest way.
“If they say they’re going to go to Cook Inlet and they’re going to study it for a couple years, then I would skeptical,” he said. “The best news for us tomorrow is a large-diameter pipeline terminating to Valdez and a bullet line going off to Southcentral from either Fairbanks or to Glennallen.”
That sentiment was echoed by Bill Walker, a supporter of the Valdez route and general counsel to the Alaska Gasline Port Authority.
Walker spoke with the Senate’s In-state Energy Committee this week to outline the efforts of AGPA as well as the need for the state to take a strong hand in developing a large-diameter pipeline. He says the market is there to export gas to Asia, but it’s a question of what it will take the producers to act.
“We need to pay attention to what’s not said,” he said about today’s expected announcement. “If it’s an announcement that talks about oil taxes with LNG studies then, boy oh boy, we have a room full of those already.”
Speaking to Bishop’s committee, Walker said to be wary about any plan that asks for financial guarantees from the state on taxes. The state constitution bars the Legislature from making long-term promises on oil taxes, he said. He also said any project should be lead by the economics than by politics.
“When I don’t hear anything about the market, to me that’s not a project,” he said. “To me, a project is where we engage in the market. That’s what we should be looking for. If there’s any discussion about fiscal certainty or exchange, it’s a dead-end. If that’s the case, then the state needs to take the plan and step up.”
Earlier this week, Walker said the state should take the lead role in planning the pipeline.
He said there’s plenty of Asian buyers interested in the gas and that a study commissioned by AGPA shows the pipeline would put hundreds of billions of dollars into the state’s treasury during the life of the project.