Processing Magazine

Alaska lawmakers OK TransCanada natgas pipeline

August 4, 2008

TransCanada Corp. won Alaskan legislative approval to build and operate a huge pipeline to ship natural gas from the North Slope to a network feeding domestic markets, according to Reuters. The Alaska Senate voted 14-5 to award a state license to TransCanada, ratifying an earlier vote by the state House. TransCanada plans to build a 1,700-mile line to an existing pipeline hub in Canada that would send about 4 billion cubic feet of Alaska natural gas a day to domestic markets. The TransCanada plan has been promoted by Gov. Sarah Palin as the best way to unlock the North Slope''s vast natural gas resources, which have been languishing mostly in operating oil fields without any means of transport to a commercial market. The license pledges state endorsement of the TransCanada plan, plus a funding match of up to $500 million to get the Calgary-based company''s application through the Federal Energy Regulatory Commission.

Palin and other TransCanada supporters said it was important to get a gas pipeline operator that is independent of the major North Slope oil producers – BP, ConocoPhillips and Exxon Mobil Corp. -- that own most of the leases to the known 35 trillion cubic feet of natural gas. The next steps will be to start field work and discussions with the producers that would ship the natural gas in the pipeline, said Tony Palmer, TransCanada''s vice president for Alaska gas development. TransCanada has estimated that the project will cost $26 billion, while consultants hired by the state put the estimate at $31 billion. Under TransCanada''s plan, the pipeline would start shipping natural gas in 2018.