Palin's Successor Talks to Exxon, TransCanada about Gas Pipeline

SAN FRANCISCO (Dow Jones Newswires), Jul. 16, 2009

Alaska Lt. Gov. Sean Parnell said Thursday that he met with executives of Exxon Mobil Corp. and TransCanada Corp. to talk about progress on TransCanada's proposed natural gas pipeline.

The discussions came a little more than a week before Parnell is scheduled to be sworn in as Alaska's new governor. He will replace current Gov. Sarah Palin -- a staunch advocate for a new Alaska gas pipeline -- who announced her resignation earlier this month.

TransCanada won a license and financial support last year from the state of Alaska to build a $26 billion pipeline that would connect gas resources at the North Slope to markets in Canada and the continental U.S. A rival gas pipeline, called Denali, is being developed by BP PLC and ConocoPhillips.

Last month ExxonMobil said it had agreed to work with TransCanada on its pipeline project, mainly by providing engineering staff and expertise. Despite that agreement, Exxon has yet to commit its natural gas resources to either project. Both sets of developers plan to hold open seasons, or solicitations of interest by gas producers, for their proposed pipelines next year.

The three oil majors and TransCanada have been under pressure to work together on one pipeline, most publicly from the U.S. Federal Energy Regulatory Commission, which regulates gas pipelines.

Parnell suggested that he might support a pipeline backed by all four companies.

"I expect more discussions to occur between the [TransCanada] project and the other producer companies," Parnell said in a statement.

The North Slope holds some 35 trillion cubic feet of known gas reserves and the state estimates undiscovered reserves could bump this figure to as much as 250 trillion cubic feet. By comparison, U.S. consumption in 2007 was just over 23 trillion cubic feet.  

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