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NEWS BULLETIN

May 17, 2011 --- Vol. 17, No. 44May 2011

Denali discontinues gas pipeline project, to withdraw FERC pre-file

Denali—The Alaska Gas Pipeline, said today that its open season efforts have not resulted in customer commitments necessary to continue work on its Alaska North Slope pipeline.html'>gas pipeline project.

Denali said it will withdraw its Federal Energy Regulatory Commission pre-file application and, over the next few months, will close out its operations.

“Denali is ending its efforts because of a lack of customer support,” Denali President Bud Fackrell said in a statement. “Denali is a market-driven company. As such, we cannot spend the billions of dollars necessary to advance the project unless we have binding agreements with shippers. Although we have been in discussions with potential shippers for nearly a year and a half, we have been unable to secure the financial commitments necessary to advance the project.”

Denali said the project has an estimated capital cost, in 2009 dollars, of $35 billion.

The company said that to date it has spent more than $165 million on the project.

Since Denali began its efforts in 2008, the company said, the North American gas market has changed significantly, primarily as a result of the development of shale gas resources.

Denali is owned by subsidiaries of BP and ConocoPhillips.

See more in May 22 issue, available online at 11 a.m., Friday, May 20 at www.PetroleumNews.com

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