BP Canada exec says Alaska gas line filing unlikely before 2007

Gary Park

Petroleum News Calgary correspondent

North Slope gas owners must move a mountain of economic and political obstacles before they can file regulatory applications, an Arctic Gas Symposium was told in Calgary March 8.

An application is likely at least three years away because of the engineering and environmental studies that have yet to be completed and the challenge of developing a plan that is commercially viable, said Ken MacDonald, vice president with BP Canada Energy’s Alaska-Canada pipeline group.

In suggesting that 2007 is the earliest date for a filing, he cautioned: “That’s just a guesstimate.”

But because “risks still outweigh rewards ... we don’t have a (commercially viable) project yet,” MacDonald said.

“We’re waiting on energy legislation in the U.S. (where the passage of an energy bill has been stalled), fiscal certainty (in Alaska) and then the producers have to come together and decide what structure to move forward, assuming everything is in place,” he said.

At that point the proponents have to complete engineering and environmental studies to prepare an application.

Allowing for all those matters “it would take us, probably, until 2007 to file an application,” MacDonald said.

Against that background, he conceded the Mackenzie Valley pipeline proposal “has at least a three-year advantage on us.”

John Carruthers, northern development vice president with Enbridge, the Canadian pipeline company, said the fundamental gas supply/demand outlook in North America lends weight to the Alaska pipeline.

But he rejected the push for an Alaska LNG terminal, arguing that would be unable to compete against global LNG suppliers.