Ready. Willing. Able. Pipeline company continues efforts to build gas pipeline project.

• Author: Liles, Patricia
• Position: OIL & GAS

For more than 30 years, Calgary-based TransCanada's subsidiary, Foothills Pipe Lines Ltd., has been working on an Alaska gas pipeline project, a massive energy transportation system that would move significant amounts of North Slope gas to the existing distribution network in western Canada and the northwestern United States.

The Canadian pipeline specialty company has maintained its interest in the Alaska gas project, despite waning activity and enthusiasm due to low natural gas prices in the 1980s and 1990s.

Now, market conditions have changed and the State of Alaska, under the administration of Gov. Sarah Palin, has taken a new tactic to encourage development of what would likely be the largest private-sector construction project built in North America.

Calling the new legal framework AGIA, for Alaska Gasline Inducement Act, the Palin administration released a list of "must-haves" that the State wanted in a gas pipeline project. Bids were solicited and evaluated, with the administration announcing in May that it believes TransCanada's gas line proposal to move 4.5 billion cubic feet of gas per day down a new Alaska Highway pipeline route is the best option for the state of Alaska.

PARTNERSHIP FORMS

The change in legal framework and negotiating tactics has made a difference in the process, said Tony Palmer, TransCanada's vice president, handling the Alaska gas line project.

"The State has taken a different position. They put forward with AGIA a real potential partnership," Palmer said, in a late June interview. "They asked for real responsibility from the applicants and provided some real rights ... they're not going to be incentivizing another large project that would be competitive with ours, but not have the same responsibility as ours."

Additionally, the State, through AGIA, promises to share the costs of the project while working toward an open season, to a maximum of $500 million. The cost-share was among some of the aspects of the TransCanada proposal that state legislators discussed during the summer special session and series of public meetings held throughout Alaska.

In his presentations, Palmer discussed the unique attributes his company provides for a gas pipeline project. Those include holding certificates under the Northern Pipeline Act in Canada, issued in the late 1970s, which provides the necessary Canadian legislation for the Alaska Highway pipeline route. This certification, combined with TransCanada's 50-plus years of...