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Foothills temporarily halts highway gasline review
Petroleum News Alaska Staff
On May 24, Foothills Pipe Lines Alaska Inc., on behalf of Alaskan Northwest Natural Gas Transportation Co., asked the state of Alaska’s Gas Pipeline Office to temporarily stop processing its right of way application for the construction and operation of an Alaska Highway gas pipeline.
“We gave our 90 day notice to terminate the agreement we made with the state last year when we resumed processing our (1981) right of way application for state lands,” Foothills spokesman Rocco Ciancio told PNA May 28. That agreement reimburses the state for the cost of processing the application. Waiting for deal with producers “We’re temporarily deferring work on our right of way applications; the permits are not being withdrawn. … We’re allowing time for other aspects of this project to catch up with where we are with the right of way application.”
The “key” missing component, Ciancio said, is a commercial arrangement between the ANNGT and the three major North Slope producers and gas owners — BP, ExxonMobil and Phillips.
“The producers are awaiting the outcome of the energy bill in Washington. That will have some impact on this project,” he said.
“We don’t believe our discussions with the producers can be advanced until the legislative agenda can be completed in Washington, D.C. It would appear that that is not going to happen before the New Year,” he said.
In 1980, ANNGT received a grant of right of way across the 434 miles of federal lands in Alaska, but the state application on approximately 200 miles of state land was put on hold due to natural gas market conditions in the Lower 48.
ANNGT is working on getting right of way on approximately 110 miles of private land.
Ciancio said Foothills expects no ANNGT layoffs connected with the suspension of the state right of way application. The four-legged stool The spokesman for BP Exploration (Alaska) Inc.’s gas group told PNA, “I think everyone recognizes how important a good federal energy bill is to moving an Alaska gas pipeline project forward. As we’ve said many times before, federal enabling legislation is a ‘must have,’” Dave MacDowell said.
In addition to passage of federal enabling legislation, he said there has to be “progress on three other areas for movement to the next phase of project engineering,” including “state of Alaska fiscal predictability; development of an efficient governmental regulatory framework in Canada (federal, First Nations, provinces and territories); technology-based project cost reductions.”
The four elements represent what MacDowell has been referring to in media reports as a “four-legged stool.”
At this time, he said, project risks outweigh potential rewards: “Delivery of the four legged stool will reduce risks. Reducing risks will help move a project forward."
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