Pact clears pipeline liability barrier, spurs proposal

PHOTO/R.J. Kelly/Homer News
The Alaska Highway natural gas pipeline project took a step forward Nov. 16 with the signing of a memorandum of understanding between six major American energy firms and three Canadian firms.

The companies are proceeding immediately with development of a proposal for transporting Alaska natural gas to markets. They expect to present a proposal to the Alaska North Slope producers by the end of this year. Once agreement is reached with the producers, the group’s goal is to deliver Alaska gas to Canada and the Lower 48 by 2008.

Alaska Gov. Tony Knowles hailed the agreement as "great news." In a press release, Knowles said the agreement eliminates a major impediment to the project, the so-called accrued liability potentially owed to the original partners of the Northwest Pipeline project, which was given rights to build a gas line along the Alaska Highway 20 years ago.

"Now that that’s been resolved, it’s time the producers come to the table with pipeline companies, the state of Alaska and other players to get this project under way," Knowles said.

"All the ... signatories were involved in developing the Alaska Highway project at one point," said Dennis McConaghy, co-chief executive of Foothills Pipe Lines Ltd. of Calgary. "Through agreement, the companies are demonstrating their intent to renew their commitment to the commercialization of vital natural gas infrastructure from the Alaska North Slope to Canada and the Lower 48."

The six U.S. companies include subsidiaries of Williams, Duke Energy, Sempra Energy International, Enron, PG&E Corp. and El Paso Corp. The three Canadian companies, TransCanada PipeLines, Westcoast Energy and Foothills, have remained active partners in the Alaska Natural Gas Transportation System from its inception.

Updated: 
11/25/2001 - 8:00pm