Nobody’s saying how much of Alaska's AGIA money is going to Exxon Mobil

ANCHORAGE, Alaska - Exxon Mobil Corp. is receiving state reimbursement for its role in the proposed natural gas pipeline project through its partnership with TransCanada Corp. But no one will say how much money Exxon has received or for what, citing confidentiality agreements.

The Alaska Gasline Inducement Act (AGIA), passed by the Legislature in 2007, put in place a licensing agreement with TransCanada that envisioned construction of a large-diameter gas pipeline from the North Slope to Canada or Valdez, or perhaps both, depending on what markets potential gas shippers might be focusing on.

AGIA includes a provision that the state reimburse TransCanada for up to $500 million that it spends on pre-construction work and to prepare an application with the Federal Energy Regulatory Commission, due in 2012.

Much of the political debate at the time was over Exxon's role in the project, primarily because Exxon is the major natural gas producer on the North Slope. Concerns were raised over whether it was fair that the state pay Exxon to do what it would do anyway - produce and sell natural gas into a pipeline.

Exxon has never signed on to the license agreement between TransCanada and the state, but within days after the agreement was finalized TransCanada officials made it clear that Exxon was a vital partner in the project.

According to testimony before the Alaska Legislature earlier this month, as of the end of June, the state will either have paid or will owe TransCanada about $125 million. Gov. Sean Parnell has asked for another $160 million for fiscal year 2012, which begins July 1.

TransCanada spokesman Shawn Howard said that TransCanada, as the AGIA licensee, seeks the reimbursement and then receives it from the state. The company then "shares the reimbursement with Exxon Mobil," he said.

Howard said TransCanada won’t reveal how much state money it has passed on to Exxon, citing confidentiality agreements.

TransCanada launches open season for proposed Alaska gas pipeline

TransCanada on April 30 began taking bids for space on its proposed natural gas pipeline from the North Slope.
The open season is the 90-day period in which a pipeline owner takes bids on space in the proposed line. Depending on the bids and the conditions placed upon them, the project might or might not proceed.
The Alaska Pipeline Project, as TransCanada has dubbed its proposal, was developed in accordance with the process outlined in the state’s Alaska Gasline Inducement Act (AGIA). That means the proposal complies with a variety of state-imposed requirements, in exchange for state assistance with the preconstruction planning and design costs and certain incentives.
The bids, if they come, will come from gas owners, and that primarily means the three major North Slope petroleum producers.
Exxon Mobil, the primary leaseholder at the North Slope’s largest undeveloped gas field, Point Thomson, is working with TransCanada. The two firms together have proposed two alternatives - a 1,700-mile line to Alberta, Canada, or an 800-mile bullet line to Valdez.

Stevens says AGIA pipeline a flop, calls for trans-Alaska gas pipeline

ANCHORAGE, Alaska - Former U.S. Sen. Ted Stevens says the AGIA pipeline plan has flopped and the state should put up billions to pay half the cost of an in-state natural gas pipeline project to Kenai.
It should also switch its support to the building of a trans-Alaska pipeline to Valdez that would export LNG to the Pacific Rim nations, Stevens told Anchorage businessmen at a Commonwealth North meeting on March 12.
“Let’s move ahead. We don’t need any more open seasons, we don’t need any more periods for analysis. We need an emphasis on getting the job done,” he said.
Stevens was among those in Alaska championing the idea of building a gas pipeline along the oil pipeline route to the coast.

TransCanada files open-season plan for proposed gas line

ANCHORAGE - TransCanada Corp. on Jan. 29 filed hundreds of pages of new information with the Federal Energy Regulatory Commission (FERC) describing how it plans to obtain commitments for natural gas to fill its proposed multibillion-dollar North Slope pipeline.
The documents show that building the pipeline could be nearly twice as expensive as TransCanada, a Canadian pipeline company, predicted three years ago. However, the new estimates - ranging from $26 billion to $41 billion - are within the range that has been used by state officials for the project, which many see as critical to Alaska's future economy.
The documents also reveal that the company is trying to sweeten the deal for potential shippers - including oil producers BP, Conoco Phillips and Exxon Mobil. TransCanada says it is reducing the amount it will charge to ship the gas by $500 million per year for 25 years, or $12.5 billion. That's possibly good news for people in Alaska: lower shipping costs translate to higher royalties and tax revenue for the state and larger profits for the producers.

New lower-48 natural gas production make arctic pipelines less attractive

ANCHORAGE – A 40-year plan to deliver natural gas from Arctic regions of the U.S. and Canada to the Lower 48 states is under threat from large shale-gas discoveries elsewhere on the continent and slow-moving regulatory processes.
Over the past decade, partnerships involving ExxonMobil, Shell, BP and ConocoPhillips have spent hundreds of millions of dollars on plans to develop Alaska's North Slope and Canada's Mackenzie Delta.
Backers of the 4.5 billion cubic feet a day (cf/d), $30 billion Alaska project and the 1.8 billion cf/d, $13.7 billion Mackenzie Delta venture have tied their hopes to an unshakeable belief that gas prices will again rise well above $10 per 1,000 cf as conventional reserves disappear.
But hopes that these projects will come on stream in the 2010-20 period are fading, because regulators and governments have failed to keep pace with industry timetables for issuing approvals and permits. More importantly, shale-gas discoveries in Texas, Louisiana and Pennsylvania make piping gas from the Arctic look less profitable.
In Alaska, Gov. Sarah Palin’s administration bet $500 million on the Alaska Gasline Inducement Act (AGIA), providing an incentive for construction of a 4.5 billion cubic-foot-per-day natural gas pipeline from Alaska’s North Slope that may never be built.
New discoveries in the Barnett Shale of Texas coupled with new ways to extract gas a mile deep from the Marcellus Shale in Pennsylvania and the Haynesville Shale in Louisiana could supply the total needs of the U.S. for natural gas for the next 100 years, making a $30 billion line from Alaska increasingly unlikely to be profitable.