April 15, 2002 --- Vol. 8, No. 40April 2002

Gas pipeline talks scheduled for Anchorage tomorrow

Industry talks about the proposed Alaska natural gas pipeline projects will enter another stage this week, as the producers’ group meets with the pipeline construction consortium in Anchorage on Tuesday.

News about the meeting became public during an energy workshop at the University of Alaska Fairbanks last week. U.S. Department of Energy senior analyst Sally Kornfeld mentioned the upcoming meeting during her presentation about issues surrounding the natural gas pipeline project. Results of a January meeting between the producers and the pipeline construction consortium were not released, Kornfeld said, adding that the builders group has said they will “negotiate with the commercial partners, but not in the press or in the government.”

She did say that the pipeline consortium group had further refined their proposal, based on feedback from the producers’ group during the January meeting. “You can gather that the producers wanted a higher volume (of production and pipeline throughput),” Kornfeld told PNA. “If you wanted to do business with the people who have the gas, you’d go in the direction they were going.”

Also during the workshop, BP Exploration’s David MacDowell said the producers’ group is now considering a project that would involve a daily throughput of 4.5 billion cubic feet, a slight increase over the 4 BCF originally included in the producers’ $125 million pipeline project study.

MacDowell declined to confirm the Tuesday meeting, saying that “we meet with companies all the time.”

Cavan Carlton, from the Houston office of Williams Cos., did confirm the meeting in Anchorage on Tuesday.

“Out of respect for our group, which has said that we will not negotiate in the press, I’ll decline to give you any specifics about the scope of the meeting,” he added. “Depending on what happens at the meeting and if it warrants, we might make a public statement afterward.” No formal press announcement is scheduled at this time, he added.

Williams is one of several companies that signed a memorandum of understanding as a pipeline construction consortium. Also included in that group are Foothills, Duke Energy, Sempra Energy, Westcoast Energy, TransCanada Pipelines, PG&E Corp., El Paso and Enron.

Revenue's spring forecast shows prices up, offshore production delayed

Commissioner of Revenue Wilson Condon said today that the department has raised its expected average Alaska North Slope crude oil price for the fiscal year ending June 30 to $20.50 a barrel, up $1.70 a barrel from the fall forecast, but expects only a "modest reduction" in the amount the state will have to draw from the Constitutional Budget Reserve.

"Although the higher oil prices have slightly reduced our withdrawal of funds from the Constitutional Budget Reserve Fund, it is not enough to give us much breathing room in dealing with Alaska's fiscal problem," Condon said. "The higher prices are certainly good news, but they reduce the total three-year draw from the Budget Reserve by only $143 million for Fiscal Years 2002-2004."

On the production side, the department said it had made modest adjustments in the fall forecast, including a three-year delay of all Beaufort Sea development as a result of BP's announcement that it is shelving the Liberty project. The department said that delay includes the Sandpiper field.

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