BP, Conoco Phillips float $30-billion Alaska pipeline plan

April 10th, 2008 - 10:58 am ICT by admin  

Washington, April 10 (DPA) Oil giants BP and Conoco Phillips have stirred debate in Alaska Wednesday with their plan to invest an estimated $30 billion in an Alaska pipeline - a direct challenge to a project by TransCanada that state government is apparently on the verge of approving. The Conoco Phillips-BP project would carry natural gas down the North Slope gas fields, along the Alaska Highway into Canada and on to Chicago.

The deal was announced Tuesday by the companies, which said they would spend $600 million by 2010 to enlist customers to make “long-term firm transportation commitments” to the project, according to a press release from the companies.

After 2010, the companies would seek the regulatory permits to move forward with construction, with a goal to start extracting gas by 2018.

The competing TransCanada is asking the state of Alaska for about $500 million in planning money, as opposed to the $600 million BP and Conoco are willing to put up of their own money, the Anchorage Daily News reported Wednesday.

Similar projects have been floated over the past decades, and the TransCanada deal has come nearest to approval.

State Senator Hollis French said the new plan could eat away at the will of the Alaska legislature to give a license to TransCanada, which unlike BP and Conoco does not control any of the North Slope’s gas reserves, the News reported.

“I hope Alaskans are viewing this with the skeptical eye it deserves,” French was quoted as saying. “It could potentially confuse people about the reality of a TransCanada pipeline with the illusion of a producer line.”

The North Slope reportedly holds 35 billion cubic metres of gas reserves.

“This project is vital for North American energy consumers and for the future of the Alaska oil and gas industry,” Tony Hayward, a BP executive, said in the press statement. “It will allow us to keep our North Slope fields in production for another 50 years.”

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