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TransCanada chief visits Alaska Gov. Murkowski says a natural gas pipeline contract should go to a special session of the state legislature for approval in the fall Alan Bailey Petroleum News Staff Writer
On June 6 Gov. Murkowski held a press conference to report on the status of negotiations regarding an Alaska gas pipeline and to introduce Hal Kvisle, chief executive officer and chairman of TransCanada. TransCanada executives were in Alaska for discussions with the state negotiators.
“We had an interesting and fruitful discussion and as you know we are looking forward to presenting this fall (a contract) to the mandatory 30-day hearing process … after that … (we’ll present) a submission to the legislature in a special session,” Murkowski said.
TransCanada and the North Slope gas producers have both submitted gas pipeline proposals to the state. A third proposal by the Alaska Pipeline Port Authority has until Aug. 5 to show the state it has access to natural gas for its project or to provide a financial guarantee of its performance in order to be eligible to negotiate with the state for a gas project under the under the Alaska Stranded Gas Development Act.
When quizzed about the length of time that the negotiations were taking, Murkowski pointed out the complexity of the issues and the amount of detail that needs to be sorted out. There are benefits and risks associated with different options and we have an obligation to flush that out and determine what’s in the best interests of the state, he said.
“We’re moving quite well on the two proposals that we have before us,” Murkowski said.
And, at a time when the state has three gas pipeline applications, the governor dismissed as premature any threats to force gas production by imposing a gas reserves tax or retracting leases. TransCanada’s position Kvisle said that TransCanada had conducted many discussions with both the state and the producers. He said that the Alaska and Canada portions of the project are quite distinct and by not objecting to U.S. enabling legislation for the pipeline, TransCanada had “effectively opened the door for a variety of different ways that the project could go ahead within the state of Alaska.”
But, ”We’ve shown no such flexibility on the Canadian side,” Kvisle added, referring to his company’s adamant position that it owns legal rights to build the Canadian portion of the Alaska pipeline, under the terms of Canada’s Northern Pipeline Act.
And with many of the right-of-way arrangements in the Yukon already in place Kvisle said that TransCanada can deliver the right of way on the Alaska project more predictably than other proposals. Expanded system Kvisle characterized the Canadian segment of the Alaska pipeline as an expansion to TransCanada’s existing pipeline infrastructure.
“We would have to augment our Canadian system by about 20 percent in order to accommodate the Alaska gas at the Yukon-Alaska border and that is our intention and that is what we’re proposing to do,” he said.
In the 1990s TransCanada built more miles of pipeline than would be required in the Alaska pipeline project, Kvisle said.
When asked about the potential for a partnership between TransCanada and the gas producers Kvisle said that he didn’t know what the producers wanted as a final outcome and that at least two of the producers had challenged TransCanada’s rights to build the Canadian portion of the project. However, Kvisle sees TransCanada as an essential player in getting Alaska gas to market.
“We’ll continue to work towards that,” he said.
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