Tuesday, April 08, 2008

British Petroleum And Conoco Phillips Announce Joint Effort To Construct Alaska Natural Gas Pipeline - No Spur To South Central Alaska Envisioned

On April 8th, 2008, British Petroleum and ConocoPhillips announced they have combined resources to construct a natural gas pipeline in Alaska. When complete, the pipeline will move approximately four billion cubic feet of natural gas per day to markets, and will be the largest private sector construction project ever built in North America. The project combines the financial strength, Arctic experience and technical resources of two of the most capable and experienced companies in the world. Along with ExxonMobil, which is not involved so far, BP and Conoco constitute the "Big Three" producers. Conoco's full press release may be viewed HERE. The Anchorage Daily News has already published a story, and ADN's Alaska Politics blog has also weighed in. The Voice of the Times has also just published an editorial about it, and they're enthusiastic, to put it mildly. KTUU Channel 2 has also filed a story.

BP and Conoco plan to spend $600 million to reach the first major project milestone, an open season, commencing before the end of 2010. Following a successful open season, a process during which the pipeline company seeks customers to make long-term firm transportation commitments to the project, the companies intend to obtain Federal Energy Regulatory Commission (FERC) and National Energy Board (NEB) certification and move forward with project construction. The FERC and NEB certificates are the critical permits that provide government authorization to construct a pipeline. BP anticipates this project will keep North Slope fields in production for another 50 years.

ConocoPhillips has now opened up a dedicated website for the Denali-Alaska Gas Pipeline project HERE.

The project consists of a gas treatment plant on Alaska’s North Slope and a large-diameter pipeline that travels over 700 miles through Alaska, and then into Canada through the Yukon Territory and British Columbia to Alberta. Should it be required to transport gas from Alberta, the project will also include a large diameter pipeline from Alberta to the Lower 48 states. BP and ConocoPhillips will seek other equity partners, including pipeline companies, who can add value to the project and help manage the risks involved. Conspicuously absent is any plan to build a spur line down into South Central Alaska to meet the growing energy needs of Alaska's primary population center. This has been a sticking point in the past because supplies of easily accessible Cook Inlet gas are expected to start declining in a couple of years.

The existing pipeline proposal on the table was conceived by Trans-Canada, whose bid was the only one of six proposals considered by Governor Sarah Palin as compliant with the provisions of her Alaska Gasline Inducement Act (AGIA), discussed on the Governor's site and on the DNR site (which offers the "meat"). However, snags have developed. Some have criticized AGIA because it only provides "takeoff points" along the proposed pipeline and does not address the issue of delivery to communities. One of the more educated and responsible critics of AGIA, former state legislator and gubernatorial candidate Andrew Halcro, points out that Moody's Investor Services is considering downgrading TransCanada's financial ratings because of an undesirable combination of rising risk and weak financial profile. The Anchorage Daily News also has a multitude of other related stories posted on their Gas Pipeline page.

The announcement by BP and Conoco is also likely to impact the upcoming special legislative session on AGIA scheduled to begin on June 3rd. Now that two other major producers have decided to jump into the fray, lawmakers may be just as interested in exploring their proposals as in discussing AGIA.

The timing of this announcement is rather auspicious, coming so soon after oil executives were recently grilled by members of Congress. Congress took the oil executives to task for their companies' windfall profits and a perceived failure to re-invest more of those profits into development.


  1. Give Alaska back to the indians. Alaska is not a white christian territory !!!!

  2. Screw you Bird.... Go back out on the ICE.... Alaska is part of the America's and if it weren't for us "stupid white men" the natives would still be in igloo's living like savages and having sex with thier sisters....And it could be worse... America got Alaska for Russia... You could have some communist telling you what to do and hualing you off to Gulag's when you think they are "stupid white men"!!!

    As for the real issue, the natural gas pipeline, there's only one way to run that and that is thru Alaska so our energy needs will be met first and foremost. That cunt Palin will sell us short... If it wasn't for Congress grilling the Oil Companies they would still be holding back on exploration and construction cause she has made it too expensive to do business here. The Gas Tax that she has pushed thru didn't do anything but that! The Federal Government is what pushed BP and Conoco.... So don't hope for a Spur.... You will be wasting your time!!!

    And why don't all you stupid natives go kill some more whales... They are almost gone... When was the last time you saw a Beluga Whale in the Cook Inlet??? Go get some aqua net and anti freeze... It will keep you warm when you are done spending your government pay check on the alcohol!

  3. Thanks for the support, Anonymous, but I suspect Abe Bird may be more of a troll trying to get under people's skin.

    Your point about Sarah Palin is worth further discussion. I still don't regret voting for her in August 2006, because she was better than the alternatives. But her reluctance to move forward on natural gas pipeline negotiations really makes me wonder if she isn't more interested in getting payback against the producers rather than get the best possible deal for us.

    Any deal must mandate a South Central Spur. Our needs must be a part of the equation from the beginning.

  4. I'm sorry, but I've got to say something here. I'm no fan of any of these comments thus far. A spur line would be a nominal expense at best for the oil companies(and that includes the gas that would eventually flow through it), but you have to understand that for a spur line to even be DISCUSSED, the actual main line must be a bonafide reality first. As in, they must have all the major producers committed to shipping gas through it, and they need to be breaking ground. The producers are avoiding this subject at the moment, as they don't want to make promises that would hurt them later. When the gasline happens, then the spur line will. And anonymous, your comments are completely offensive. I don't care if you don't like Palin or Native Alaskans. You could try and do something besides prove your own narrow minded, pig headed view of the world. Then maybe your points would be considered valid by more than your hick buddies who are yelling "hell yeah!" in your ear. And I saw a huge pod of Belugas from downtown Anchorage last summer. Just because you're busy doing your dirty business doesn't mean the rest of the world stops.

  5. I saw a huge pod of Beluga's in the "Knik Inlet" last fall. Yes, way the heck up there!

    Anonymous...you are very hateful. Don't point out the splinter in some one else's eyes when you have a log in your own.