ANCHORAGE, Alaska (Reuters) - Five companies, partnerships and entities have submitted proposals to build a massive pipeline from Alaska's North Slope to bring the region's vast but long-languishing natural gas reserves to markets thousands of miles away, state officials announced late on Friday.
By Yereth Rosen
ANCHORAGE, Alaska (Reuters) - Five companies, partnerships and entities have submitted proposals to build a massive pipeline from Alaska's North Slope to bring the region's vast but long-languishing natural gas reserves to markets thousands of miles away, state officials announced late on Friday.
The proposals, submitted under the Alaska Gasline Inducement Act passed by the legislature earlier this year, will vie against each other for state support. Friday was the deadline for applications to be submitted.
"This is such an exciting day for Alaska and really an exciting day for America," Gov. Sarah Palin, who organized the competitive-bidding strategy, said at a news conference. "Today's progress under AGIA demonstrates to the world that Alaska is well on our way to bringing this long sought-after infrastructure, a natural gas pipeline, to fruition."
!ADVERTISEMENT!The applications came from the Alaska Gasline Port Authority, which proposes a liquefied natural gas project; AEnergia LLC; TransCanada Corp <TRP.TO> in partnership with Foothills Pipe Line Ltd; China-based Sinopec ZPEB; and the Alaska Natural Gas Development Authority, which proposes a spur line to Alaska's population centers, state officials announced.
"We are thrilled with this list," Palin said. "It is time to get this project up and running."
The state launched its competitive-bidding strategy after decades of frustration over the failure to develop the North Slope's natural gas amid staggering costs -- estimated in recent years at $20 billion to $30 billion -- and an uncertain U.S. market for the fuel.
A deal negotiated by Palin's predecessor, Gov. Frank Murkowski, and the major Alaska oil producers -- Exxon Mobil
<XOM.N>, BP <BP.L> and ConocoPhillips <COP.N> -- collapsed after being widely blasted as a giveaway to the oil giants.
The state's producers have been critical of the state's new approach of soliciting competing gas pipeline proposals, saying the law's mandates are overly restrictive and place too many financial risks on them.
ConocoPhillips said on Friday it has submitted an alternative proposal for a natural gas pipeline, separate from the AGIA process, that would run a pipeline to the existing transportation hub in Alberta or all the way to Chicago.
"We'll hear them out, but they won't be considered under this AGIA process," Palin said.
The North Slope has about 35 trillion cubic feet of proven gas reserves, enough to supply the United States for a year-and-a-half at current consumption rates, and is believed to hold several times as much in undiscovered reserves.
Palin and her administration plan to select a preferred proposal from the AGIA bids and submit it for legislative approval early next year. The winning project is in line for state financial and regulatory assistance.
The competing proposals consider different ways to move North Slope natural gas to U.S. markets, including overland routes through western Canada and a pipeline to the Alaska port of Valdez that would allow for tanker shipments of liquefied natural gas.
(Reporting by Yereth Rosen, editing by Eric Walsh)
