More Calls to Reconsider All Alaska Gas Pipeline

This week former Alaskan Governor Walter Hickel sent a letter to current Governor Sarah Palin stressing the importance of reconsidering the all Alaska liquidfied natural gas (LNG) proposals.

The two all Alaska proposals include the Alaska Gasline Port Authority proposal, and the Sinopec ZPEB proposal.

Sinopec ZPEB carries so much political baggage it's hard to believe that Hickel is seriously suggesting that the State of Alaska give the Chinese firm another bite at the apple.

The Port Authority has already called for reconsideration in a January 10th letter.

Governor Sarah Palin has responded to Hickel and agrees that her team will evaluate the potential of a tidewater LNG project. From her frame of reference a tidewater LNG project would probably follow the AGIA process by exploring the vaguely worded TransCanada LNG option.

The TransCanada proposal includes wording indicating that TransCanada is willing to "consider offering gas treatment and transportation services from Prudhoe Bay to an LNG terminal should shippers commit sufficient volumes to support such services in the initial binding open season".

That's a lot of conditions one upon the other. But once again all roads lead back to the producers and sooner or later the State of Alaska will have to strike a deal that meets their investment rate of return criteria.