Homer Alaska - Business -

Story last updated at 7:07 PM on Wednesday, September 3, 2008

Governor signs AGIA



By Tim Bradner
Morris News Service - Alaska

Alaska Gov. Sarah Palin signed legislation Aug. 27 authorizing a special license granting gas pipeline incentives to TransCanada Corp., but the license itself won't be issued to the company for 90 days, Palin spokeswoman Sharon Leighow said.

Palin signed the bill during a noon speech to Alaska labor leaders in Anchorage.

The Legislature approved the legislation Aug. 1, but Palin didn't formally receive it until Aug. 20.

TransCanada had hoped to get the license issued earlier this summer which would have allowed field work to be done to prepare for an open season the company will hold to solicit customers for its project.

Some work has been started, however. Aerial photopgraphy has been completed on part of the pipeline route from the Brooks Range to Fairbanks and route segments will be done from Fairbanks to the Canada border and along a potential spur line route to Valdez when weather improves.

The company also plans to open its office in Alaska soon, he said. In an Aug. 1 press release TransCanada said it plans a binding open season by July, 2010.

The delay in granting the license means the company will have to delay field work it hoped to do in 2008, but TransCanada vice president Tony Palmer said this won't jeopardize the schedule for the 2010 open season. The license grants TransCanada rights to a $500 million state grant and special procedures for state permits.

In return, TransCanada agreed to a package of state requirements including special provisions related to pipe expansions and tariff structures.

Meanwhile, a rival pipeline group led by two North Slope producers started field work in late spring in preparation for an open season in 2010. The Denali pipeline group, owned by BP Exploration Alaska and ConocoPhillips, plans to spend $40 million in environmental and permit work by the end of the year, company spokesman Scott Jepsen said.

The Denali group plans to spend $600 million to prepare construction cost and tariff estimates for its open season. TransCanada told legislators last summer that it plans to spend about $80 million to do cost and tariff estimates for the open season.

Jepsen said contractors to Denali have wrapped up their summer work and will begin winding down activity in a few days.

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