Natural Gas

BP and ConocoPhillips have gotten a favorable ruling from the Federal Energy Regulatory Commission on the duo’s request for an early review of their $30-billion plan for a gas pipeline from Alaska’s North Slope to the Lower 48 through Canada.

The two companies said their proposed pipeline could be operational by 2018 with the two filing for final Ferc approval by 2011. The two formed a company for this project, Denali–The Alaska Gas Pipeline. Their plan calls for a 48-inch or 52-inch pipeline that would start at Prudhoe Bay and deliver up to 4 billion cubic feet of gas per day to the Lower 48.

With their pre-filing move, Denali can start to work with Ferc in drafting environmental, engineering and economic studies before the official, final application is filed.

But, here’s the rub. There’s already a pipeline plan being considered by the Alaskan government — and it’s not the BP and ConocoPhillip project.

Alaskan Gov. Sarah Palin is trying to get the state legislature to OK a plan by TransCanada Corp. That plan calls for a 1,700-mile pipeline from Prudhoe Bay to an existing hub at the Alberta-British Columbia border. Palin has argued for the TransCana plan by saying that an independent owning the pipeline such as TransCanada would provide greater access to future players in the oil and gas fields. TransCanada’s pipeline plan comes with a $26-billion price tag.

Lawmakers have until August to reach a decision on the TransCanada plan. The Denali plan isn’t even on their agenda.

Stay tuned. This little dust-up isn’t over as the dueling pipelines continue moving forward — with both sides saying their plan is the best move to get stranded gas from the North Slope to the Lower 48..

–John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com

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