Alaska gas line: Exxon says it will own a part

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The planned natural gas pipeline will likely parallel the Trans Alaska oil Pipeline. (AP Photo/Al Grillo)

Exxon Mobil said it “plans to be a co-owner” of a natural gas pipeline off Alaska’s North Slope if it is built by Canadian pipeline giant TransCanada.
In public comments the company submitted as part of the State of Alaska’s efforts to get a pipeline plan off the ground (summarized here by the Anchorage Daily News) Exxon said it expects to own a stake equal to its share of the gas moving through the huge pipeline:

Exxon is the largest holder of North Slope natural gas, controlling more than 36 percent in the enormous Prudhoe Bay field.
While stopping short of asking state officials to reject TransCanada’s bid, Exxon in a 14-page analysis faulted numerous aspects of the Calgary-based company’s pipeline proposal.
TransCanada is the only bidder Gov. Sarah Palin is considering for the license, which requires the Legislature’s approval.
One Exxon criticism is that TransCanada, which proposes a 1,715-mile, $26 billion pipeline down the Alaska Highway through Canada, is seeking too much profit, which could trim state gas tax and royalty collections by billions of dollars.
Another criticism is that TransCanada aims to funnel Alaska gas exclusively into its own Alberta pipeline network, Exxon said, preventing gas shippers from using pipes run by other companies.

Alaska officials received more than 300 comments, including Exxon’s, before a 60-day public comment period closed last week. Other comments:
• Houston-based ConocoPhillips, which has submitted a pipeline proposal outside the state’s system, joined Exxon and the third major North Slope producer, BP in warning that TransCanada’s “withdrawn partners” liability could doom its pipeline project. What’s that? The ADN explains:

The liability stems from an old partnership involving TransCanada. The partnership spent hundreds of millions of dollars pursing a pipeline before stopping work in the early 1980s. The partnership agreement calls for former partners to get back their investments with interest if a pipeline starts up, and the tally now stands at about $9 billion. TransCanada contends the liability issue isn’t a big worry.

BP officials say awarding TransCanada the license “would significantly delay, and possibly prevent, a successful gas pipeline project from moving forward.” The company noted that TransCanada itself has urged the state to reach a tax deal with the oil companies holding the gas.
The Woodlands-based Anadarko Petroleum Corp., a North Slope explorer and partner with Conoco in the large Alpine oil field, said it has some concerns but “fully supports TransCanada’s application in principle.”

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