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Over-the-top gas pipeline called ‘outlandish, bizarre’ TransCanada PipeLines CEO says Northern Route proponents have no money, no gas and no producer support; won’t join project so ‘radically new’ Gary Park PNA Canadian Correspondent
TransCanada PipeLines Ltd. is one of the strongest promoters of developing Arctic natural gas in Alaska and Canada, but wants nothing to do with the Northern Route option, chief executive officer and president Hal Kvisle said Jan. 28.
In one of the bluntest, most biting criticisms yet of the “over-the-top” proposal by Houston-based Arctic Resources Co. and its Canadian affiliate, ArctiGas Resources Corp., he said TransCanada is “not supporting that project in any way.”
In a conference call, Kvisle accused ArctiGas of making “outlandish” and “bizarre” attempts to sway residents along the Mackenzie Valley and gain backing for the plan to build a pipeline through the Northwest Territories that would be wholly owned by an aboriginal corporation and fully financed by debt.
But he said the ArctiGas group has put no money on the table and is not planning to, controls no gas and has so far failed to entice any producers to endorse the proposal.
No substantial cost advantage He also argued there is no substantial cost advantage in integrating gas from the North Slope and Mackenzie Delta into one delivery system that would be “bigger than anything that has been built.”
Kvisle said TransCanada was not interested in participating in a project so “radically new and different” and he was not aware of any enthusiasm for the idea among the major Arctic gas owners who he insisted will ultimately make the decision on a pipeline route. The Northern Route pipeline has also faced heavy opposition from the state of Alaska and the Northwest Territories government, but has managed to win over some aboriginal groups.
While conceding that the local communities and land owners are an important factor in the pipeline equation, Kvisle said he was concerned that those groups might become interested in a project “that isn’t going anywhere.”
He said the issue of a pipeline route would be a “whole lot easier” to discuss if ArctiGas was not floating its proposals among aboriginals.
Kvisle’s remarks came just four days after the board of the K’asho Got’ine Land Corp. in the Central Mackenzie Valley said it had reached a land access agreement with the Northern Route Gas Pipeline Corp., an aboriginal-owned corporation which is working with ArctiGas to consult with aboriginal landowners.
He said TransCanada, the largest Canadian gas pipeline company, has spent the last 30 years exploring ways to get Arctic gas to Alberta and, from there, to southern Canadian and U.S. markets and has held frequent discussions with producers over the last three years since the revival of plans to develop the Arctic.
Mackenzie standalone doable Kvisle said a standalone Mackenzie Valley pipeline of medium-diameter is “doable” with just Delta gas volumes.
He said construction of such a pipeline would not be a particularly difficult undertaking and could proceed “fairly quickly.”
TransCanada is joint owner of Foothills Pipe Lines Ltd., which has worked for over 20 years to promote the Alaska Highway project and has the exclusive right to build and operate the Canadian segment of that project. It, along with other Canadian pipelines, has also been discussing the Mackenzie Valley proposal with the Mackenzie Delta Producers Group.
The company says on its Web site that TransCanada is “well positioned to play a key role in getting natural gas from northern Alaska and the Mackenzie Delta to the growing North American marketplace.
“We have the experience and necessary know-how to help northern producers bring their natural gas to market.”
TransCanada observes that bringing both the North Slope and Delta on stream would fill only 25 percent of the expected North American demand growth.
TransCanada has also been in talks with the Aboriginal Pipeline Group, which has a memorandum of understanding with the Mackenzie Delta producers that is a framework for one-third aboriginal ownership of the Mackenzie Valley pipeline.
The Aboriginal Pipeline Group is trying to obtain up to C$70 million in funding to secure its place in the preparation of regulatory applications. TransCanada is seen as a possible source of that money, although Kvisle gave no indication that such a deal is in the works.
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