TCPL’s Kvisle views Alaska Highway gasline MOU as ‘effectively dead’
Gary Park, PNA Canadian correspondent
The agreement signed last November by nine North American pipeline and utility heavyweights to develop a plan for carrying Alaska gas to Lower 48 markets is “effectively dead,” said TransCanada PipeLines Ltd. chief executive officer Hal Kvisle.
Although TCPL has not formally decided to withdraw from the memorandum of understanding, that is “a moot point” given the financial and credit woes of Duke Energy Corp. and Williams Gas Pipeline, on top of the collapse of Enron Corp.
“We probably don’t need to make that decision because the MOU’s effectively dead,” he said in a conference call with analysts July 29.
Kvisle said the MOU was designed o reestablish a consortium of partners who pulled out of the Alaskan Northwest Natural Gas Transportation Company 10 years ago by and develop a proposal to cost-share the Alaska portion of a pipeline.
But he said the North Slope producers — ExxonMobil Corp, Phillips Petroleum Co. and BP — still have the option of building the Alaska section of the pipeline, adding “a lot of these complicated issues have a long way to go.”
Kvisle said TCPL has spent a lot of time trying to persuade the Alaska producers that an integrated solution to use whatever spare capacity might exist in TCPL’s mainline system five or six years from now is the best answer for transporting North Slope gas.
Because of declining volumes from Western Canada Sedimentary Basin, the mainline to Eastern Canada and the U.S. could become a “stranded asset” within 10 to 15 years, he said.
“I think at the end of the day gas will flow to the most economic market, in the absence of some government decree to the contrary, and those most attractive markets generally tend to be south rather than east of us,” he said.
The TCPL mainline delivered an average 7.2 billion cubic feet per day in the second quarter.
TCPL and Duke are joint owners of Calgary-based Foothills Pipe Lines Ltd., which owns the right-of-way for the highway pipeline.
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