AGIA coordinator: Exxon Mobil makes North Slope pipeline more likely to succeed

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Related Companies Exxon Mobil Corp. TransCanada Corp. (TRP)

Related Documents Industry Document "AGIA Coordinator Releases Alaska Pipeline Project Report" presented on 11/3/2009 Industry Document "Alaska Pipeline Project Report" presented on 10/31/2009

Related Articles 10/19/2009 ANGA executive: Alaska pipeline would diversify nation's gas supply portfolio 10/2/2009 Canadian regulators removing Mackenzie pitfalls for Alaska pipeline proposals 6/11/2009 Exxon Mobil partners with TransCanada on Alaska gas pipeline

Related Issues in Focus Alaska gas pipeline

TransCanada Corp. is on schedule to hold the initial open season for its proposed North Slope natural gas pipeline by the end of July 2010, according to a report submitted to the Alaska Legislature.

In the Oct. 31 report, the Alaska Department of Natural Resources and Department of Revenue said the project received a significant boost in pre-open season investment when TransCanada teamed with Exxon Mobil Corp. over the summer. The project previously received a license from the state under the Alaska Gasline Inducement Act, which laid out requirements and deadlines in return for $500 million in matching state funds.

"This is exactly the type of commercial alignment which AGIA was developed to encourage," said Mark Myers, who serves as AGIA coordinator for the Alaska DNR. "Exxon Mobil brings upstream development expertise, the wherewithal to design a gas treatment facility and invaluable technical data of the gasline route as an owner of [the Trans-Alaska Pipeline System]."

DNR Commissioner Tom Irwin said Exxon Mobil's financial investment makes the pipeline project more likely to succeed. "We are seeing a joint effort by these companies that will result in increased pre-Open Season spending from $83 [million] to $150 million. This is encouraging," Irwin said in a statement.

The project now has a management team of 100 full-time employees — 50 from each company — and has established a new office in Anchorage, according to the report. TransCanada also is using various technologies to map the route of the pipeline and LNG alternatives, and is nearing completion of its in-state gas demand study, the agencies said.

"It is critical to Alaska that we keep this project moving forward. The advancement of Alaska's gas pipeline cannot be dictated by short-term market fluctuations. We must continue to shorten the time to get to the actual project go-ahead decision, or 'project sanction.' The open season is an important step, but continuing to the project sanctioning decision is the key," Alaska Department of Revenue Commissioner Pat Galvin said in a statement.