Saturday, January 26, 2008

TransCanada in the Spotlight

The sole AGIA approved proposer TransCanada is beginning to draw serious criticism.

The first criticism of the TransCanada proposal comes from ConocoPhillips which refers to a potential $9 billion liability from the last serious attempt to build the Alaska Gas Pipeline.

The potential $9 billion liability is the net present value of a $250 Million liability from 1980 related to TransCanada's participation in the Alaskan Northwest Natural Gas Transmission Co. (ANNGTC).

ConocoPhillips put TransCanada's Tony Palmer, vice-president of Alaska development, on the defensive and force him to admit "We said that ANNGTC is not viable. We're not going to use those old assets" "We're not using the old right-of-way, we're not using any of those existing assets. We did not use them in our application, we will not use them going forward."

TransCanada is receiving more criticism from parties that point out that the TransCanada proposal is conditional. They point out that the TransCanada proposal relies on the State of Alaska to negotiate a tax deal with the major oil companies. In that respect the TransCanada proposal is on equal footing with the rejected ConocoPhillips proposal.

Apparently Governor Palin's team is standing by the selection of TransCanada and has issued a four page response to a commentary by
Andrew Halcro.

The Governor's team calls the Halcro commentary as a "Mischaracterization"

Halcro calls for the State to abandon the AGIA and negotiate with the legal leaseholders.

Looks like the gloves are coming off but Halcro makes the point that the timing is critical.

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