JUNEAU, Alaska - One of two groups planning to build major natural gas pipelines in Alaska has dropped its bid, saying on May 17 that it didn't get the shipping agreements necessary to justify continuing.
The announcement came from the Denali partners - BP and ConocoPhillips.
Denali had been competing to build a line with Calgary-based TransCanada Corp. and partner ExxonMobil. The latter continue to press ahead with their proposal.
Denali said it is withdrawing its application before the U.S. Federal Energy Regulatory Commission after spending US$165 million and investing more than 760,000 man-hours in the effort.
In a statement, Denali said it didn’t have the required commitments to move ahead with the application.
“Denali is a market-driven company. As such, we cannot spend the billions of dollars necessary to advance the project unless we have binding agreements with shippers,” said Bud Fackrell, Denali president. “Although we have been in discussions with potential shippers for nearly a year and half, we have been unable to secure the financial commitments necessary to advance the project.”
TransCanada officials said that although it remains the sole survivor, Denali’s decision to withdraw doesn’t guarantee it will be able to come to commercial terms with Alaskan producers.
It plans to present its own application to the FERC in October of 2012.
Showing posts with label Denali Pipeline. Show all posts
Showing posts with label Denali Pipeline. Show all posts
Thursday, May 19, 2011
Wednesday, June 30, 2010
Competing Alaska gasline joint ventures said considering merger
ANCHORAGE - The BP/ConocoPhillips Denali joint venture that is planning to build a massive natural gas pipeline from Alaska to the Lower 48 is in preliminary talks to join a competing project headed by TransCanada and Exxon Mobil, according to a source familiar with the projects.
The BP/Conoco project, known as the Denali Pipeline, received approval from federal regulators earlier this month to conduct an open season to solicit interest in the project from North Slope gas producers. The TransCanada/Exxon project - which won a special license to build a pipeline from the State of Alaska in 2008 - received its open season approval in March.
The $30-billion-plus price tag on the project means it is highly unlikely two pipelines would actually get built - a joining of the projects has long been seen as inevitable.
But BP's growing financial burden from the Gulf of Mexico oil spill may be accelerating the process. BP has already announced plans for up to $10 billion in asset sales, and likely changes in its capital spending.
Dave MacDowell, a spokesman for Denali, said he wasn't aware of such discussions, but stressed that BP and ConocoPhillips "have said repeatedly they are open to considering involvement of any entity that adds value and takes on risk."
The natural gas pipeline would be among the largest single energy infrastructure projects in the world. It would include a massive natural gas processing plant on the North Slope and 1,700 miles of pipe that would most likely run to Alberta, Canada. There, existing pipelines would carry the gas to U.S. markets.
Alaska granted TransCanada a license in January 2008 to build the long-sought companion to the Trans-Alaska Pipeline System, which has been moving oil to U.S. markets since 1977.
That license followed a public bidding process initiated by then-Alaska Gov. Sarah Palin, who canceled a pipeline deal that her predecessor, Frank Murkowski, had negotiated in closed-door sessions with the three major North Slope producers.
The three producers - Exxon Mobil, BP and Conoco - did not take part in Palin's state bidding process, saying it did not provide the kind of tax and tariff assurances they needed. ConocoPhillips announced its competing project shortly after, and BP joined in that project in April 2008.
Many were skeptical of the state-backed project from the beginning, saying it could not proceed without cooperation from the producers. Dwindling state coffers in Alaska, which relies heavily on royalty payments and taxes from oil and natural gas production, also undermined support.
But last year Exxon Mobil said it would partner with TransCanada on the state-backed project. Exxon Mobil holds many of the largest natural gas fields on the North Slope.
The BP/Conoco project, known as the Denali Pipeline, received approval from federal regulators earlier this month to conduct an open season to solicit interest in the project from North Slope gas producers. The TransCanada/Exxon project - which won a special license to build a pipeline from the State of Alaska in 2008 - received its open season approval in March.
The $30-billion-plus price tag on the project means it is highly unlikely two pipelines would actually get built - a joining of the projects has long been seen as inevitable.
But BP's growing financial burden from the Gulf of Mexico oil spill may be accelerating the process. BP has already announced plans for up to $10 billion in asset sales, and likely changes in its capital spending.
Dave MacDowell, a spokesman for Denali, said he wasn't aware of such discussions, but stressed that BP and ConocoPhillips "have said repeatedly they are open to considering involvement of any entity that adds value and takes on risk."
The natural gas pipeline would be among the largest single energy infrastructure projects in the world. It would include a massive natural gas processing plant on the North Slope and 1,700 miles of pipe that would most likely run to Alberta, Canada. There, existing pipelines would carry the gas to U.S. markets.
Alaska granted TransCanada a license in January 2008 to build the long-sought companion to the Trans-Alaska Pipeline System, which has been moving oil to U.S. markets since 1977.
That license followed a public bidding process initiated by then-Alaska Gov. Sarah Palin, who canceled a pipeline deal that her predecessor, Frank Murkowski, had negotiated in closed-door sessions with the three major North Slope producers.
The three producers - Exxon Mobil, BP and Conoco - did not take part in Palin's state bidding process, saying it did not provide the kind of tax and tariff assurances they needed. ConocoPhillips announced its competing project shortly after, and BP joined in that project in April 2008.
Many were skeptical of the state-backed project from the beginning, saying it could not proceed without cooperation from the producers. Dwindling state coffers in Alaska, which relies heavily on royalty payments and taxes from oil and natural gas production, also undermined support.
But last year Exxon Mobil said it would partner with TransCanada on the state-backed project. Exxon Mobil holds many of the largest natural gas fields on the North Slope.
Thursday, November 19, 2009
Bush appointee resigns as U.S. coordinator for Alaska gas pipeline project
ANCHORAGE - Republican Drue Pearce, the federal official responsible for coordinating planning for the proposed Alaska natural gas pipeline, has resigned her position at the request of the Obama administration.
Pearce, a former Alaska state Senate president who has held the position since it was created by then President George W. Bush in 2006, said she will step down effective Jan. 3.
The Office of the Federal Coordinator for Alaska Natural Gas Transportation is reviewing competing plans offered by both TransCanada Corp. and a joint venture formed by BP and ConocoPhillips to build a pipeline to ship natural gas from Alaska's North Slope to domestic U.S. markets.
Pearce was the first person to hold the job, which is designed to keep federal agencies working together to get the pipeline built without undue delay. Some 22 federal agencies in the United States - plus others in Canada Thomas Barrett- must sign off on an environmental impact statement before the project can move forward.
Alaska Sen. Lisa Murkowski, who is the top Republican on the Senate Energy and Natural Resources Committee, said she was pleased that Pearce's deputy, retired U.S. Coast Guard Vice Adm. Thomas Barrett, will serve as the interim coordinator until the White House appoints someone new.
Pearce, a former Alaska state Senate president who has held the position since it was created by then President George W. Bush in 2006, said she will step down effective Jan. 3.
The Office of the Federal Coordinator for Alaska Natural Gas Transportation is reviewing competing plans offered by both TransCanada Corp. and a joint venture formed by BP and ConocoPhillips to build a pipeline to ship natural gas from Alaska's North Slope to domestic U.S. markets.
Pearce was the first person to hold the job, which is designed to keep federal agencies working together to get the pipeline built without undue delay. Some 22 federal agencies in the United States - plus others in Canada Thomas Barrett- must sign off on an environmental impact statement before the project can move forward.
Alaska Sen. Lisa Murkowski, who is the top Republican on the Senate Energy and Natural Resources Committee, said she was pleased that Pearce's deputy, retired U.S. Coast Guard Vice Adm. Thomas Barrett, will serve as the interim coordinator until the White House appoints someone new.
Tuesday, June 23, 2009
TransCanada, Denali leaders says gas line is needed despite glut
JUNEAU, Alaska - Low natural gas prices don't pose a threat to the Alaska natural gas pipeline, a top official with TransCanada Corp. said on June 18.
"That's the nature of the gas business - the price goes up and the price goes down," said Tony Palmer, vice president for Alaska development with the Alberta-based company, in a meeting with the Juneau Empire's editorial staff.
TransCanada knew when it began the process that natural gas prices fluctuate, Palmer said.
Industry sources have speculated that Alaska gas is not needed, given new means of producing gas in deep shales in the Lower 48. A top executive at Enbridge Inc. recently expressed doubts publicly that there is enough demand for Alaska gas, given the pipeline's cost.
TransCanada is working together with Exxon Mobil Corp., one of the state's three big natural gas lease holders, on its pipeline, developed under the Alaska Gasline Inducement Act.
A competing pipeline, Denali, is being developed by BP PLC and ConocoPhillips Co., the other two big leaseholders.
Denali spokesman Dave MacDowell said despite today's low natural gas prices, his company also expects a pipeline to be viable.
"That's the nature of the gas business - the price goes up and the price goes down," said Tony Palmer, vice president for Alaska development with the Alberta-based company, in a meeting with the Juneau Empire's editorial staff.
TransCanada knew when it began the process that natural gas prices fluctuate, Palmer said.
Industry sources have speculated that Alaska gas is not needed, given new means of producing gas in deep shales in the Lower 48. A top executive at Enbridge Inc. recently expressed doubts publicly that there is enough demand for Alaska gas, given the pipeline's cost.
TransCanada is working together with Exxon Mobil Corp., one of the state's three big natural gas lease holders, on its pipeline, developed under the Alaska Gasline Inducement Act.
A competing pipeline, Denali, is being developed by BP PLC and ConocoPhillips Co., the other two big leaseholders.
Denali spokesman Dave MacDowell said despite today's low natural gas prices, his company also expects a pipeline to be viable.
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