Enbridge CEO Patrick Daniel thinks the Canadian government will make a decision “very soon” on construction of the Alaska gas pipeline through Canada.
TransCanada’s boss Hal Kvisle has “no particular expectation for this week … or any week.”
And the government itself is refusing to offer any hints.
Based on his reading of rumors rather than hard information, Daniel said June 13 he expects a “preliminary indication” from the government “of where they stand … this week or next.”
He said Ottawa has now had several months to ponder the alternatives and “should be in a position to make a decision.”
But Kvisle believes his rival is overly optimistic that a ruling is at hand.
Speaking at a Canadian Association of Petroleum Producers investment symposium, he said rumors have been rife, but there has been no direct communication from Ottawa pointing to a specific date.
Spokesmen in the Natural Resources Department would only say no meetings are scheduled and no deadline has been set.
The pipelines and North Slope producers are in a holding pattern awaiting a verdict on whether Canada will uphold the 1978 Northern Pipeline Act giving exclusive rights to TransCanada, or agreeing with Enbridge that others should be allowed to bid in a “fair, open and competitive” process.
Kvisle told the CAPP symposium that TransCanada’s rights remain intact, regardless of Enbridge’s claim that the 1978 legislation is outdated, and were supported in a November 2003 letter from then-prime minister Jean Chretien.
He argued that connecting Alaska gas into TransCanada’s extensive pipeline network could slash tolls by C$1 billion a year.
Kvisle said it is also vital for Alberta to integrate Alaska gas “with existing pipeline systems … and bring an economy-of-scale benefit.”
He warned that if the producers go it alone, and build a “bullet line” through Canada, Alaska gas will “steam right through” Alberta.
Daniel told the symposium that Enbridge is making a case to BP, ExxonMobil and ConocoPhillips for his firm to play a role in building and operating the pipeline.
However, he conceded the gas owners have a right to proceed on their own.
Speaking to a Canadian-American Business Council in Washington, D.C., on June 8, Ken Konrad, senior vice-president of BP Exploration Alaska, said the trio is concerned that if Ottawa chooses to go exclusively with the Northern Pipeline Act it could inject “unwanted and unnecessary” delays into an already drawn-out process.
He said BP would prefer that the government leave the legislation intact while opening the door to a fresh round of bidding before the National Energy Board.
Kvisle told the Washington conference that the Northern Pipeline Act is the fastest way to build the pipeline because it eliminates virtually all bureaucracy in Canada.
But he indicated TransCanada is ready to work with the producers to complete the entire project.
“We recognize that the producers at Prudhoe Bay will be a deciding factor,” he said.
Meantime, Yukon Premier Dennis Fentie said in a statement June 8 that elements of the Northern Pipeline Act are good for his territory, especially the “certainty” afforded by “access to and egress from the future line,” existing certificate and a pipeline corridor protected by law.
The act “provides certainty to industry as the right of way is recognized as a third party right,” he said.
Fentie said the legislation “creates a Yukon advantage,” while any projects regulated by the National Energy Board “may encounter significant challenges in these areas.”
However, Fentie assured Northwest Territories Premier Joe Handley that the Yukon supports development of the Mackenzie Gas Project as well to ensure that the northern Yukon’s gas reserves “are not stranded.”
