Open season for natural gas in Alaska: TransCanada, ExxonMobil, ConocoPhillips, BP market pipeline plans.

• Author: Orr, Vanessa
• Position: OIL & GAS

[ILLUSTRATION OMITTED]

It's open season in Alaska, and while that term might normally conjure up images of trophy fish or big game, the fact is, there are even bigger prizes to be had at the end of this first-time ever event. In March, the Federal Energy Regulatory Commission (FERC) approved TransCanada Alaska's proposed plan for conducting the first-ever open season for Alaska North Slope natural gas, and at the time of this article, was expected to approve a second open season for Denali-The Alaska Gas Pipeline beginning in July.

During open season, companies involved in the Alaska Pipeline Project (a joint effort of TransCanada and ExxonMobil) and Denali-The Alaska Gas Pipeline (a joint effort of ConocoPhillips and BP PLC) will solicit bids from shippers to offer firm commitments to ship natural gas through their proposed pipelines. According to the AGIA (Alaska Gasline Inducement Act) website, the process, which runs a minimum of 90 days per open season, is designed to promote competition in the exploration, development and production of natural gas, and provide the opportunity to ship additional natural gas supplies through subsequent open seasons.

[ILLUSTRATION OMITTED]

[ILLUSTRATION OMITTED]

"Open season is when companies go to market and talk to shippers about what they plan to build, how long it will take, what the cost is and more," explained Larry Persily, federal coordinator for Alaska Natural Gas Transportation Projects. "This is when they find out if there is anyone willing to commit to shipping gas on their pipeline. Is there enough demand? Are they building their pipeline to the right size? Signed shipping agreements will gauge market demand."

While the Alaska Pipeline Project was able to begin seeking shipping commitments on April 30, Denali was expected to hold its own open season in July. Both projects expect to be on line by 2020, delivering approximately 4.5 billion cubic feet of gas per day to North American markets.

THE PROPOSALS

In November 2007, TransCanada Alaska and Foothills Pipe Lines Ltd. jointly submitted an application under AGIA to build a 4.5 billion cubic-feet-per-day 48-inch-diameter natural gas pipeline. The Alaska Pipeline Project offers two alternative routes; the first, an approximately 1,700-mile line from a new natural gas treatment plant at Prudhoe Bay on the North Slope to Alberta, Canada; the alternative pipeline route, the Valdez option, would extend approximately 800 miles from the Point...