Competition Thickens for Alaska Natural Gas Pipeline

An open-season plan for an Alaskan natural gas transportation was proposed to FERC April 7, 2010, by the Denali-The Alaska Gas Pipeline LLC (Denali-Alaska), owned by affiliates of BP America and ConocoPhillips Co. The plan seeks to obtain binding commitments for the acquisition of initial capacity. The project is designed to carry 4.5 Bcf/day of natural gas reserves from Alaska's North Slope to markets in Canada and the Lower 48 and includes an option to boost capacity to 5.6 Bcf/day. Denali-Alaska would build the "Alaska Project," which includes a gas treatment plant on the North Slope. Denali Canada-The Alaska Gas Pipeline (West) Inc. would build the "Canada Project" to move gas from Alaska to markets in Canada. If FERC approves the Denali-Alaska open season plan, the open season will run from July 6 to October 4, 2010. The Canada-Project segment of the pipeline will need approval from Canada's National Energy Board. If all goes according to plan, gas would begin to flow on the proposed facilities sometime in 2020.

This Alaska natural gas transportation project is competing with another proposed by Denali-Alaska's rival, TransCanada Alaska Co. LLC. (TransCanada-Alaska), which is a partnership between TransCanada and ExxonMobil Corp. TransCanada-Alaska's plan is to build a 4.5 Bcf/day pipeline extending 1,700 miles to Alberta.

The State of Alaska issued TransCanada-Alaska project an exclusive license on December 5, 2008, pursuant to the Alaska Gasline Inducement Act (AGIA). The AGIA gives TransCanada-Alaska a $500 million reimbursement for start-up costs. FERC also has given TransCanada-Alaska the green light to conduct its open season for binding commitments to purchase capacity in the project. TransCanada-Alaska's open season is expected to begin in late April 2010.

FERC's review of the open-season plans for the both projects is being conducted as part of the pre-filing phase of the two Alaska Projects.

For additional information about the FERC process for approving Alaska natural gas transportation projects, go to: http://www.ferc.gov/industries/gas/indus-act/angtp.asp