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Gas price not showstopper TransCanada CEO doesn’t think slide is permanent, Alaska line still economic Gary Park For Petroleum News
The helter-skelter state of natural gas markets does not convince TransCanada Chief Executive Officer Hal Kvisle that North America is facing a price drop that will change plans for an Alaska gas pipeline.
Although gas is sliding toward half its 2008 peak in July, it is still strongly above last year’s low point.
Kvisle told reporters in Toronto Oct. 5 that although the commodity price is “always a big concern and a big risk” for a project on the scale of the Alaska pipeline “I still don’t think we’re in an environment of falling natural gas prices.”
“The real comparison is what was the bottom in the gas market this year versus what it was a year ago and we’re actually up a bit over a year ago,” he said.
Kvisle was not willing to say how low prices would have to slide before the project would become uneconomic, partly because of the 10-year lead-time needed for regulatory approvals and construction.
He said the current annual gas price average makes the Alaska project economic and that will remain the case so long as today’s prices keep building.
Focus on benefit agreements Speaking to an Opportunities North conference in Whitehorse, Yukon, Oct. 2, TransCanada Vice President Tony Palmer said his company will stay out of land claims with First Nations along the proposed pipeline route, but it is ready to negotiate commercial benefits agreements with the aboriginal communities.
“We believe that this project … will be to the benefit of individual First Nations, whether they have a land claim resolution or not.
“But our discussions with First Nations will be about benefits and about commercial agreements, not about land claims.”
That echoed the refusal by the Imperial Oil-led Mackenzie Gas Project consortium to be drawn into land claims disputes along the Mackenzie Valley right of way.
Palmer said an Alaska line could not be built across Canadian territory without the cooperation of First Nations and other communities along the route.
He said TransCanada hopes to settle commercial benefits agreements with First Nations before the end of 2009.
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