While it’s disappointing that BP and ConocoPhillips have decided to shut down their Denali project, there remains a lot of interest in getting Alaska’s natural gas off the North Slope to Alaska households and bigger markets Outside.
Ultimately, it will be the market that determines how we monetize our gas resources. I do not believe, though, that this signals an end to those efforts. The good news is that there are still several proposals for both an out-of-state line and an in-state line that could deliver real benefits to Alaskans.
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.