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Vol. 15, No. 27 Week of July 04, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

TransCanada denies talk of gas pipeline deal with rival Denali

Contrary to recent press reports quoting unidentified sources, TransCanada’s outgoing CEO Hal Kvisle said June 30 that his company is not in direct talks with the owners of its rival North Slope gas pipeline project, BP and ConocoPhillips, to bring the latter companies into TC Alaska’s gas line project.

“They are a competitor. And we respect them as a competitor. But there’s no reason for the two of us to talk to each other,” Hal Kvisle told the Canadian Press on June 30, his last day at the helm of the giant Calgary-based pipeline company.

TransCanada is partners with ExxonMobil on the state-approved “Alaska Pipeline Project,” while BP and ConocoPhillips own the competitive project, “Denali—The Alaska Gas Pipeline LLC.”

Only one major pipeline is expected to be built to carry North Slope gas to Outside markets.

Tony Palmer, lead on the Alaska project for TransCanada, told CanWest the same thing the day before, on June 29.

“I can tell you we have discussions with potential shippers about many, many things. Shipping, volumes, returns, all of the standard things, and those discussions are ongoing under extensive confidentiality agreements,” Palmer said.

Since ExxonMobil, ConocoPhillips and BP are the primary holders of known natural gas reserves on the North Slope, TransCanada has been talking to all of them about shipping their gas in its pipeline.

But the people at BP and ConocoPhillips that TransCanada is talking to are on the production side of the business, and are not involved with Denali in any way, Kvisle told CP.

“This is nothing new. We’ve been having those discussions not only with ExxonMobil but with ConocoPhillips, BP and Chevron as well,” he said. “The big oil companies in Alaska are in some ways on both sides of the table.”

TC Alaska’s 90-day open season, during which it solicits shipper commitments, closes July 30.

Palmer told CanWest he expects to get the big bites at the 11th hour.

“You won’t be surprised to hear that those parties are very sophisticated players,” he told an Anchorage audience in early May. “They always wait until the last day or two to submit their bids,” with gas prices being a significant deciding factor.

Palmer reiterated his desire to see TC Alaska’s gas line project merge with the Denali project.

—Kay Cashman



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