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Denali open season under way July 6
Kristen Nelson Petroleum News
Denali — The Alaska Gas Pipeline LLC, began its open season July 6. The open season, when bids are solicited from potential shippers for capacity in the gas pipeline, ends Oct. 4.
Denali’s open season proposal was approved by the Federal Energy Regulatory Commission, subject to some changes, on June 7. In a summary of revisions, Denali, jointly owned by BP and ConocoPhillips, told FERC it had clarified procedures for notifying bidders of any reduction in maximum daily quantity allotment and provided shippers with 15 days after the notice to accept or reject any reduced capacity.
Denali said it also clarified its procedure for awarding capacity in the event of oversubscription: first to conforming bids and second to nonconforming bids submitted before the close of the initial open season.
The company said it supplemented its process to notify bidders of any design reconfiguration “that results in a material change in transportation rates or capacity allotment” and said it would allow shippers to terminate precedent agreements within 15 days of receipt of Denali’s notice of revised rate estimates.
One section deleted A section of the precedent agreement requiring bidders to commit in advance to resubmit bids in the event FERC requires Denali to hold a revised open season was eliminated.
The process by which additional services could be added to Denali’s tariff was clarified by requiring Denali to file a request for such a change with FERC.
Denali also said it clarified that proposed in-state transportation rates were designed using volumes derived from the in-state study.
Denali said it also made revisions resulting from updated work, commercial discussions with potential shippers, changes to conform U.S. and Canadian agreements and tariffs, and clarifications.
The company reserved the right to change its precedent agreement “in a not unduly discriminatory manner” based on further discussions with potential shippers and to revise the indicative tariff before including it in an application to FERC for a certificate to reflect elements negotiated in the open season, “modifications or additions deemed necessary by Denali, and changes to satisfy current North American Energy Standards Board” standards.
Binding agreements sought Denali will seek binding agreements for one or more of the following: transportation on the transmission lines on the North Slope (into the gas treatment plant); gas treatment service; gas compression service; and transportation on the main gas line.
There will be a contemporaneous open season for the Canadian portion of the line; that open season is subject to review by the National Energy Board.
The open season notice and additional information are available on the Denali website at www.denalipipeline.com.
The competing project, the Alaska Pipeline Project sponsored by TransCanada and ExxonMobil, began its open season April 30; that open season concludes July 30.
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