Palin and America's Largest Pipeland Project

safe, secure and domestic source of energy

http://gov.state.ak.us/agia/

State of Alaska > Governor > News > News Details

AGIA Passes, Palin Thanks Legislators
Historic Day in Alaska



No. 08-131

August 1, 2008, Juneau, Alaska  Governor Sarah Palin today thanked lawmakers 
for passing House Bill 3001, legislation that authorizes the administration to 
award the Alaska Gasline Inducement Act (AGIA) license to TransCanada Alaska 
(TC Alaska) to permit, develop and build a 1,715-mile natural gas pipeline from 
a natural gas treatment plant at Prudhoe Bay on the North Slope to the Alberta 
Hub in Canada. This is a historic day in Alaska, Governor Palin said. Alaskas 
potential to continue providing a safe, secure and domestic source of energy is 
great. I am proud of the hard work that went into this process from both the 
gasline team and the legislature. And I thank all our legislators for their 
tireless efforts.

The TransCanada Alaska gasline will be the largest construction project in the 
history of North America. The TC Alaska line will ship 4.5 Billion cubic feet 
per day (Bcf/d) through the 48-inch diameter line. The line will also have the 
expansion capability of up to 5.9 Bcf/d. Further expansions would include a 
combination of additional compression and looping.

The Alaska section of the TC Alaska overland route will be mostly buried along 
the approximately 750 miles in length with six compressor stations at startup 
and five natural gas delivery points in Alaska.

The Governor continued, Today, with the affirmative vote of both chambers of 
the Alaska State Legislature, we now begin a lifelong partnership with a 
company that has shown its true commitment to Alaskas future.

TransCanada Corporation has successfully constructed many natural gas pipelines 
and now operates more than 36,000 miles of natural gas pipelines in North 
America. TC Alaskas project will provide positive economics to the state and 
federal governments, the major North Slope producers and to TC Alaska.

In its application, TransCanada Alaska commits to nearly two dozen must-haves 
which ensures that this project provides the most jobs for Alaskans, the most 
energy for Alaskans, and the greatest amount of revenue for the state.

Among the must-haves:

  Benchmarks. TC Alaska has committed to enforceable benchmarks. For example, TC 
Alaska will hold an open season and file for regulatory permits by dates 
certain. Alaska has never seen enforceable timelines in any previous gasline 
plan.

  Reasonable transportation rates. TC Alaska has committed to providing 
transportation through its pipeline at reasonable transportation rates, or 
tariffs. A low tariff not only increases the netback for Alaska, but it 
encourages long-term exploration and development by newer players on the North 
Slope. Alaska has never seen commitments to low tariffs in any previous gasline 
plan.

  Distance-sensitive rates for Alaskans. TC Alaska has committed to 
distance-sensitive rates for Alaskas gas. TC Alaskas proposed 
distance-sensitive rates ensure that Alaskans will pay just the costs incurred 
to ship gas from the North Slope to one of the five off-take points within 
Alaska; unlike today when Alaskans pay the competitive price on the world 
markets.

  Expansion capabilities. TC Alaska has promised to expand its pipeline system 
on reasonable terms. Expansion is a key component, especially for smaller and 
newer gas producers on the North Slope to get our gas that they produce to 
market. Making this line expandable to accommodate new gas discoveries means 
more exploration and development, and finally opens up the North Slope basin. 
Alaska has never seen commitments to reasonable and predictable expansions in 
any previous gasline plan.

  LNG Y-line offered. TC Alaska has offered to construct a Y line from Delta 
Junction to an LNG processing facility in Prince William Sound if shippers 
express sufficient demand for that project as the work on the overland project 
progresses. Approving the TC Alaska project will enhance the likelihood of a 
successful Y line LNG project.

  Bullet line to southcentral. A smaller bullet line will not interfere with the 
TC Alaska project. Rather, moving both projects forward simultaneously could 
produce unique synergies. There are adequate supplies of natural gas to fill 
both pipelines.

  Spur lines to Alaskans. Committing to five offtake points along the main line, 
the TC Alaska project also offers the potential for construction of spur lines 
that will make natural gas available as a source of energy to communities 
throughout the state.

Once the AGIA license is issued, TransCanada Alaska will begin the field work 
that it can complete in the remaining time before winter sets in.

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