Enbridge sends mixed messages on gas line

Gary Park & Kay Cashman

For Petroleum News

Enbridge has told Alaska Gov. Sarah Palin and the state that it won’t be part of any process to build an Alaska gas pipeline that does not have backing of the North Slope resource owners, Chief Executive Officer Pat Daniel said in a conference with analysts Aug. 1. He said the process under the Alaska Gasline Inducement Act, AGIA, “won’t work effectively” unless it has the support of BP, ConocoPhillips and ExxonMobil.

Daniel’s message “is consistent” with Enbridge’s public message throughout the AGIA process, Alaska Commissioner of the Department of Revenue Pat Galvin told Petroleum News Aug. 2.

But Galvin found the?timing of Daniel’s statements “curious … because we are with the governor in Juneau today to participate in a meeting requested by Enbridge.? We have been told by representatives of Enbridge that they want to express their excitement for the project,” he said in an e-mail to Petroleum News.

But Galvin wasn’t surprised by Daniel’s remarks. “AGIA is a competitive process, so we can expect, and in fact we are seeing, a lot of misdirection and misinformation floated around,” he said.?“We probably won’t know until the application deadline what the parties true intentions may be.”

Daniel said Enbridge officials “continue to advise the governor and the state that unless they can get a consortium of producers together to file under the AGIA we won’t be a participant in the process.”

He said his information is that to date there is “not a lot of active interest for trying to mount a project without producers’ support.”

Prior to introduction of AGIA, Enbridge had lobbied intensively to take a role in an Alaska pipeline, challenging the claims by rival TransCanada that it had exclusive rights to build any section of the line crossing Canadian territory.

Enbridge officials told the Alaska Legislature during hearings earlier this year that the company would not participate without the producers (see “Enbridge says gas a must” in March 25 issue of Petroleum News).

Enbridge is also seen as the leading contender to build and operate a natural gas liquids pipeline as part of the Mackenzie Gas Project. That line would extend from the Mackenzie Delta to Norman Wells in the Northwest Territories, where it would tie in with an existing crude pipeline to northern Alberta. TransCanada is the front-runner to build the main gas pipeline along the Mackenzie Valley.

But Daniel said the Mackenzie Gas Project, like the Alaska project, is not “moving at the pace we would like to see,” given the need by consumers to see the gas come on stream, because so little new gas has been delivered to North American markets “in some time.”