Parnell not giving up on all-land gasline option

Alaska Gov. Sean Parnell is supporting continued work on a land natural gas pipeline to Canada although he is now urging North Slope producers to support an alternative pipeline to a possible large liquefied natural gas project at a southern Alaska port, a state official told a federal agency conducting an environmental review of the project Feb. 13.

“The governor does not want work on the pipeline to Alberta to stop,” Kurtis Gibson, gas pipeline coordinator in the state Department of Natural Resources, told a panel at an environmental scoping meeting in Anchorage conducted by the Federal Energy Regulatory Commission.

“Recognizing the dynamics of the market and that conditions change, the governor wants to preserve the option of the pipeline to Alberta but to also investigate the likelihood of a pipeline to tidewater to supply gas as LNG to the overseas market,” Gibson said.

The FERC panel concluded its environmental scoping meetings in Alaska for the proposed $40 billion-plus gas pipeline project at the Anchorage meeting. The pipeline is being proposed by TransCanada Corp. and ExxonMobil Corp., with support provided by the state. 

Scoping is the first stage in preparation of a Draft Environmental Impact Statement for the project, FERC senior biologist David Swearingen told local residents and state and federal agency officials at the final scoping meeting in Anchorage. Swearingen presided over the meeting.

The scoping process itself will close Feb. 27 after which FERC begins work on the draft EIS, he said. The FERC team traveling in Alaska has held meetings in Fairbanks and small communities  near the planned pipeline route to get comments from local people and federal agency staff on environmental issues related to the project.

The proposal is for a 1,717-mile pipeline from the North Slope to Alberta with 745 miles of the 48-inch pipeline in Alaska, which is the part regulated by FERC. There is an additional 58-mile line that would bring Point Thomson gas to Prudhoe Bay that is also part of the project, and which would also be reviewed by FERC.

TransCanada and ExxonMobil will file an application with FERC for the project this fall under an agreement with the state of Alaska, which is financially supporting the project. The draft EIS is expected to be issued at about that time.

The state of Alaska is footing the bill for most of the preliminary work on the project.

So far about $250 million has been spent in preliminary engineering, environmental and regulatory work with the state paying about $150 million of that, Gibson said.

TransCanada and ExxonMobil held an open season in 2010 and received bids for capacity, but details of the responses remain confidential. The project meanwhile continues to face commercial challenges amid the glut of low-price shale gas in Lower 48 market, TransCanada vice president Tony Palmer has said in previous statements.

TransCanada is obligated to continue work toward its application to FERC under the agreement with the state, Palmer said.

If TransCanada/ExxonMobil project is changed to a pipeline to southern Alaska for an LNG project, not all of the investment in engineering and planning for the all-land pipeline would be lost.

“A portion of the information prepared for the Alberta/Alaska project would apply to a potential LNG project. The specifics would depend on the scope and destination (for a pipeline to southern Alaska) for a potential LNG project,” TransCanada spokesman Shawn Howard said.

11/07/2016 - 2:28pm