TC: Gas prices key in pipeline effort

TransCanada Alaska executive Tony Palmer told an Anchorage audience May 10 that natural gas prices could seriously hurt his company’s quest to build a gas pipeline from Alaska’s North Slope to Lower 48 markets.

Palmer’s remarks come during open season, when gas producers are deciding whether to buy shipping space on the potential Alaska Pipeline Project, sponsored by TC Alaska and ExxonMobil.

Palmer says those gas owners are trying to determine how feasible it would be to use the line, and gas prices are a key factor. He says $4 gas prices are “rather depressing” for those on the production side.

Today’s prices, however, are not as important as those in 2020, when TC Alaska and partner ExxonMobil hopes to have a line up and running, with construction starting as soon as five years from now if all goes according to plan.

As of May 11, none of the producers, including ExxonMobil, have reserved space in the proposed pipeline, but Palmer considered it business as usual.

“You won’t be surprised to hear that those parties are very sophisticated players,” he said. “They always wait until the last day or two to submit their bids,” with gas prices being a significant deciding factor.

Palmer also reiterated his desire to see the Alaska Pipeline Project merge with a competing BP and ConocoPhillips project, known as Denali—The Alaska Gas Pipeline LLC.

Open season for the Alaska Pipeline Project began April 30 and will close July 30.

Editor’s note: Tony Palmer’s speech was covered by KTUU and picked up by the Associated Press. Both reports were included in this article, which was compiled by Petroleum News.