NEWS BULLETIN

April 19, 2004 --- Vol. 10, No. 40April 2004

TransCanada, state sign agreement for gas line development

TransCanada Corp. has signed a memorandum of understanding with the state, pledging to submit an application under Alaska’s Stranded Gas Development Act while the state agreed to process the company’s right-of-way lease for a proposed natural gas pipeline from the North Slope to the Canadian border.

Gov. Frank Murkowski announced the agreement today at an Anchorage Chamber of Commerce luncheon.

TransCanada is one of several companies and public corporations looking to build a pipeline for moving North Slope gas to market.

“TransCanada holds federal authorizations including the right-of-way lease to construct the line through Alaska, as well as the right to build the line through Canada,” Murkowski said, referring to U.S. and Canada laws and gas line treaty of the late 1970s. “TransCanada is clearly one key part of the equation for the project.”

After obtaining the gas line right of way, and putting together shipping contracts sufficient to finance the multibillion-dollar project, the company would be willing to turn over the right of way to another developer for the Alaska portion of the project, the governor said. The Calgary-based company would retain the Canadian portion of the line for itself.

The offer is contingent on the developer of the Alaska portion of the line acknowledging TransCanada’s exclusive rights to the project and agreeing to connect with TransCanada’s pipeline system to move the gas to Alberta for distribution to North American markets.

“This is a very large project that will require the cooperation of a number of parties,” said Hejdi Feick, company spokeswoman.

TransCanada has agreed to reimburse the state for the costs of processing the right-of-way application and also the company’s Stranded Gas Act application.

The Stranded Gas Act allows the state and a gas line developer to negotiate a long-term fiscal contract for payments in lieu of state and municipal taxes on the project. The law does not limit negotiations to a single applicant, and the North Slope producers and the state have been negotiating a contract since February.


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