Alaska gas pipe: TransCanada keeps majority ownership.
TransCanada keeps lead in Alaska pipe
TransCanada remains the primary shareholder in a proposal to build a natural gas pipeline from Alaska’s North Slope to the Lower 48.
The Canadian pipe giant today announced that it would team with US supermajor ExxonMobil on the project, but TransCanada executive Tony Palmer said in a conference call with reporters that his company was retaining a majority interest.
ExxonMobil executive Marty Massey declined to specify ExxonMobil’s stake in the project or any other terms of the agreement during the press conference.
The pairing does not change TransCanada’s licence under the state’s Alaska Gasline Inducement Act (AGIA), the companies said.
Under AGIA, TransCanada is entitled to the state's exclusive endorsement, plus up to $500 million in state subsidies and regulatory preference and streamlining, in exchange for adhering to a series of state commitments.
ExxonMobil is not currently a participant in the AGIA licence but said Massey they would work with the state to become one.
Massey did not give a timetable or a process for those discussions with the state.
TransCanada still plans to have an open season for participation in the pipeline, which is projected to have a capacity of 4.5 billion cubic feet, in July next year.
Before that, it will update its current cost estimate of $26 billion, which was done in mid-2007.
Palmer said he would like to have gas flowing by 2018.
Prior to the open season, TransCanada and ExxonMobil will spend $150 million on development and planning, up from $80 million originally planned by TransCanada.
TransCanada and ExxonMobil said they would like supermajors BP and ConocoPhillips to join them in the project under the AGIA licence.
Massey said ExxonMobil would work with BP and ConocoPhillips to bring them on either through a contract to carry their gas production or as equity partners.
However, a Denali spokesman told Dow Jones Newswires that the partnership had no desire to join the TransCanada-ExxonMobil project under the current terms of the state licence.
Representatives of both companies said the agreement on the Alaska pipeline does not mean the death a proposed Mackenzie pipeline to bring gas from northern Canada to the Lower 48.
The two projects have long been viewed as vying for the same market.
TransCanada is working on that project as well, with a consortium of producers led by Canadian giant Imperial Oil. ExxonMobil owns 70% of Imperial.
“We think the market can take both projects,” Palmer said.
Massey said the questions about Mackenzie should be posed to Imperial but said he understood there was “no change” in the company’s plans for that pipeline.
ExxonMobil recently began developing its Point Thomson gas field on the North Slope.
The company has fought with state regulators over the pace of development there, with the state threatening to strip its leases there if the supermajor did not drill, but Massey denied there was any link between development of the long-dormant gas field and the company’s participation in the pipeline or any deal between ExxonMobil and the state.