|
TransCanada wants piece of pipe Company says it holds rights to Alaska gas line under 1970s’ certificates Larry Persily Petroleum News Government Affairs Editor
Efforts to build a North Slope natural gas pipeline sometime during the next decade will depend in part on whether the parties can work through or work around a 1976-1978 series of U.S. and Canadian laws and a treaty between the two nations governing an Alaska gas line project.
Calgary-based TransCanada, with operates more than 24,000 miles of gas pipe in Canada and holds an interest in 4,500 pipeline miles in the United States, believes it holds the still-valid 1977 U.S. regulatory certificate and 1978 Canadian certificate to build an Alaska natural gas line.
The approvals apply to the Alaska Natural Gas Transportation System, a specific project designed almost 30 years ago to carry an average 2.4 billion cubic feet per day from the North Slope into Alberta for distribution through the North America pipeline grid. The certificates and 1977 U.S.-Canada treaty detail an exact route, the sites for compressor stations and other specifics for the line that was never built.
TransCanada has held recent talks with MidAmerican Energy Holdings Co., which is looking at building a North Slope pipeline, and ongoing discussions with the three major North Slope producers, which also want to build a line to move their gas to market, said Hejdi Feick, spokesman for the Canadian company. TransCanada ready to talk TransCanada is ready to work with either developer, so long as they acknowledge the company’s claim to exclusive rights to build and operate the portion of the line in Canada, Feick said. The company also believes it holds similar legal rights to the Alaska portion of the line, though Feick said the company would consider transferring its rights to the Alaska mileage in exchange for either developer signing up TransCanada to build the Canadian line.
MidAmerican and the North Slope producers don’t necessarily agree the only way to move Alaska gas to Lower 48 markets is through TransCanada’s claim to permits almost three decades old.
“We’re not saying we’re building the ANGTA project,” said MidAmerican project leader Kirk Morgan, referring to the 1976 Alaska Natural Gas Transportation Act in Congress that led to the 1977 U.S. law and cross-border treaty granting the project rights to Northwest Pipeline Co., which through a series of mergers and acquisitions came under TransCanada’s control.
MidAmerican’s proposed gas line may follow much the same route and use data made available by TransCanada, but it could be considered a different project, Morgan said. As such, he said, it would not be limited to the existing permits and the company could apply to the U.S. Federal Energy Regulatory Commission for its own certificate under the Natural Gas Act that regulates pipeline construction. No decision from MidAmerican At this point, Morgan said, the company isn’t ready to say which procedural process it might follow.
MidAmerican is proposing to build only the 745 miles of the line in Alaska, stopping its pipe at the Yukon Territory border. TransCanada is MidAmerican’s most likely partner for the Canadian portion of the line, Morgan said. “We think it makes sense because of the licenses they hold,” he said, and because of TransCanada’s extensive Western Canada pipeline network.
BP Exploration (Alaska) believes the producers’ pipeline proposal is different enough from the dormant Northwest Pipeline venture that the companies are not necessarily restricted to relying on TransCanada’s claim to exclusive rights to the project. The producers are proposing a line at 4.5 billion cubic feet, almost twice as large as the old project, with more compressor stations and route changes from the 1970s’ proposal, said BP gas project spokesman Dave MacDowell.
“We believe a greenfield process is certainly one of the possibilities,” MacDowell said of the producers’ options for permitting the project. FERC report looks at issues “There are no simple answers to the legal questions posed,” said a 2001 FERC staff report on whether the treaty, laws and certificates of 25 years ago are the only way to get the line built.
The report does note, however, that the Alaska Natural Gas Transportation Act of 1976 “does not bar proposals that might compete” with the Northwest Pipeline certificate.
ConocoPhillips Alaska President Kevin Meyers declined to answer whether his company believes TransCanada holds exclusive rights to any Alaska gas line project. “We’re interested in talking to people who bring value to the table,” he said. “Clearly, they have skills and value.”
Standard & Poor’s Ratings Services also sees value in TransCanada’s potential to take part in an Alaska gas line project. The agency Jan. 23 boosted its commercial paper rating for Foothills Pipe Lines Ltd., which is 100 percent owned by TransCanada. In raising Foothills to an A-1 rating, S&P noted: “Foothills’ ownership of the construction and operating rights to the Alaska Highway Pipeline Project is important to TransCanada’s interest in transporting Alaska gas.”
For its part, TransCanada is encouraged to see two potential developers step forward and apply to the state of Alaska to start negotiations for a fiscal contract for the project, Feick said.
| 