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Year-end report from North Slope producers gas team won’t happen
Kay Cashman
Dave MacDowell, external affairs manager for the North Slope producers $100 million gas commercialization study, told PNA Dec. 17 the gas team expects “to have the engineering, technical, and cost data … submitted to the sponsor companies by the end of the year.”
Each of the sponsor companies — BP, Exxon and Phillips — will conduct an “internal, individual analysis and review of the data,” MacDowell said.
“A grand year-end report from the gas team is not going to happen. Sponsor companies must have time to conduct internal analyses first,” he said.
The result of the individual company reviews “will determine potential next steps, whatever they may be,” he said. According to MacDowell, the Alaska Gas Producers Pipeline Team hopes sometime early in the New Year “to be in a position to share study results.”
Press reports inaccurate Recent press reports alleging a gasline from the North Slope through Canada to the Lower 48 could cost more than initial estimates due to increased security concerns since the Sept. 11 terrorist attacks are not true, MacDowell said: “Safety, security, operational integrity and environmental protection have always been at the top of our list of priorities. That was true before Sept. 11 and it remains true.”
The same reports said the companies based their study on earning at least a 15 percent profit.
That is not true, MacDowell said.
“For general modeling purposes, a 15 percent discount rate was used as a ‘placeholder’ assumption. However, each company has its own evaluation criteria and I would not begin to speculate on definitions of ‘acceptable’ profitability. Let’s suffice to say neither route has been shown to be economic; we’re working to create an economic project,” he said.
Feds, state play role
Federal enabling legislation is “critical — a must have” for a gas commercialization project to move forward, MacDowell said.
Senate Majority Leader Tom Daschle, D-S.D., has introduced as part of his energy legislation “a version of the enabling language that closely approximates what the producers submitted for consideration,” he said.
“That legislation as it pertains to Alaska gas is an excellent step in the right direction. We were encouraged not only by the content but by the intent. It provides a clear, predictable, market driven regulatory process that’s available to any project sponsor, not just our group,” he said. “We look forward to working with the Alaska delegation on this important topic.”
Senate debate on the energy legislation is expected in February.
“Fiscal certainly from the state remains another vital part of the equation and hopefully conversations with the state will continue,” MacDowell said. “The rules must be clear and understood.”
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