Friday, August 8, 2008

Interesting Times for Alaska

ANOTHER ITEM from the Globe and Mail interview with TransCanada CEO Hal Kvisle got lost in the smoke and steam resulting from Kvisle's comment that "nothing goes ahead until Exxon is happy with it."

Kvisle also suggested in an interview last Sunday with the Toronto-based newspaper that Denali and TransCanada are likely to join forces sometime in the next two years.

At least that is the apparent implication of his statement . . .

that it's unlikely more than one open season will be held in 2010. "This is not about TransCanada dreaming up the project we think will work," he said. "It's about the five key parties getting together and crafting something here." The five parties are apparently the three big producers, TransCanada and the state of Alaska.

Kvisle noted that plans at this point call for both Denali, the company formed by ConocoPhillips and BP to build a gas pipeline, and TransCanada to hold open seasons in 2010. The open season is when customers are solicited to ship their gas through a pipeline.

The Globe and Mail reporter said Kvisle told him it's unlikely two open seasons will be conducted. That makes sense, since TransCanada couldn't really compete with a line being built by the companies that control North Slope gas — nor could it woo the companies away from using their own pipeline.

But it would mean at least one of the two entities would either delay an open season — TransCanada is obligated by its contract with the state of Alaska to hold an open season in 2010 and Denali is ahead of TransCanada — or Kvisle expects both sides to join forces sometime in the next two years.

So unless natural gas prices go in the tank sometime soon, which doesn't seem likely, the next two years should be an interesting time in Alaska.

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