|
TransCanada’s Kvisle sets the record straight Says producers must be part of gas line project, disagrees with description of how Canada portion would be handled Kristen Nelson Petroleum News
Gov. Frank Murkowski read part of a July 13 letter from Hal Kvisle, chief executive officer of TransCanada, at the conclusion of a July 13 address to a joint House-Senate session of the Alaska Legislature. The part the governor read supported the fiscal contract the Murkowski administration has negotiated with BP, ConocoPhillips and ExxonMobil.
“TransCanada recognizes the importance of the agreement you have reached with the ANS producers — it is difficult to see how a gas pipeline from the North Slope to North American markets could proceed expeditiously without the agreement and support of the ANS supporters,” Kvisle said.
He said TransCanada is willing to convey its Alaska “rights, extensive technical and environmental information and other assets … to a producer-led project that involves TransCanada on the Canadian side of the border.”
Kvisle went on to say that TransCanada takes no position on the issues that need to be resolved between the state and the producers about specific terms of the contract, “except as noted under section 2 of this letter.”
“To the extent that your agreement with the ANS producers would lead to the expeditious construction of the project, and provided that the matters addressed in section 2 are resolved, we are generally supportive of the gas pipeline agreement which you have reached with the ANS producers. We encourage the State of Alaska to resolve the outstanding issues, ratify the agreement and move forward.”
So, what’s in section 2? The governor did not read from section 2 of the letter, in which Kvisle says that TransCanada objects to the proposed joint state-producer ownership of the Canadian segment of the line, and provisions committing the state to a National Energy Board regulatory process within Canada.
“As you know, TransCanada holds valid property rights to build and own the Canadian section of the project, and we have no option but to defend those rights on behalf of our Canadian shareholders,” he said. The company has “invested several billion dollars to pre-build and pre-engineer the project within Canada, and we will take all necessary actions to protect investments that were reviewed, approved and implemented pursuant to Canada’s Northern Pipeline Act,” Kvisle told the governor.
In other words, while TransCanada is in general support of the state moving ahead with the Alaska portion of the project in conjunction with the producers, TransCanada maintains its resolve to build the Canadian portion of the line.
TransCanada working with producers Kvisle said “TransCanada has developed commercial proposals for the construction, ownership and operation of the Canadian section” and continues to discuss those proposals with the producers. “We believe commercial negotiations will lead to a reasonable ‘win-win’ outcome in Canada, if the determination of ownership of the Canadian section can be deferred until matters in Alaska are finalized,” he said. “Alternatively, we are prepared to engage immediately to negotiate a commercial framework for the Canadian section, with the intention of including that framework in your agreement with the producers, prior to state ratification.”
Kvisle asked that the state amend its agreement with the North Slope producers “to either defer determination of ownership in Canada or to reflect the key elements of a commercial agreement with TransCanada. Either approach would minimize the risk of delay within Canada.”
Independent pipelines defended Kvisle also defended an independent pipeline project, telling the governor that TransCanada recognizes that its independent pipeline proposal “could lead to delay and litigation” unless the producers were willing to commit their gas to the project.
TransCanada’s proposal was designed to encourage Alaska North Slope producer participation “by offering them a commercially viable arrangement and an opportunity for ownership in the Alaska portion” of the gas pipeline project, he said.
“The shipping terms and risk sharing mechanisms contained in our proposal were innovative, competitive and economically sound,” he said. “We continue to see our proposal as a realistic alternative in the event you are not able to reach closure on your current arrangement with the ANS producers.”
| 