Like many Alaskans, I am disappointed to hear today’s news that the Denali project is no longer pursuing the gas line. We’ve always known a gas line can only succeed if there is a market for the gas, and prices are low while supplies are plentiful in the lower 48 markets right now.
But this is also about planning for the long-term and the growing U.S. demand for gas, especially from utilities, could make the Alaska pipeline economically possible down the road.
There’s no doubt Alaska needs a gas line for 2020 and beyond to attract the investment dollars that will be necessary to produce more oil. I hope the State and the producers can all work together to move an Alaska gas line forward in the future. I stand ready with the rest of the Alaska Congressional Delegation to move increased loan guarantees forward to help secure a pipeline project.
The Denali Alaska Gas Pipeline, owned by subsidiaries of BP and ConocoPhillips, announced today it will pull out of Alaska’s North Slope over the coming months due to a “lack of customer support.”
Denali President Bud Fackrell described Denali as “a market-driven company” and said it can’t afford to continue investing the “billions of dollars necessary to advance the project” without the necessary financial commitments and support from shippers.
According to the company, Denali will withdraw its Federal Energy Regulatory Commission pre-file application.
The company said its open season did not result in the “customer commitments necessary to continue work on its Alaska North Slope gas pipeline project, which has an overall estimated capital cost of $35 billion [in 2009 dollars].”
Citing “substantial” work-to-date, Denali said it has spent “over $165 million and invested more than 760,000 man-hours in its work effort.”
This story is still developing.