Friday, May 30, 2008

More News on Point Thomson Gas

Reuters reports: "New studies into the field's geology show that immediate shipments of the natural gas would waste what could be a huge oil field,"

Reserve Estimates:
In-place reserves - 490 million to 600 million barrels of natural gas liquids
580 million to 950 million barrels of oil.

In-place natural gas 8.5 trillion to 10.4 trillion cubic feet

Compare that to North Slope proven reserves of 35 trillion cubic feet.

According to the consultant (Anil Chopra of PetroTel), the best use of Point Thomson's hydrocarbons would be to produce the liquids for about 20 years before starting to send the natural gas into a yet-to-be-built pipeline.

According to Deepa Poduval of Black and Veatch, the proposed Alaska Gas Pipeline would carry 4 billion cubic feet a day at start-up rather than the previously expected 4.5 billion cubic feet a day.

I'd be curious to know how this squares with ExxonMobil's opinion of the Point Thomson field.

Meanwhile - It's back to court before 15 June for the next phase in the State of Alaska vs. ExxonMobil Point Thomson story.

Thursday, May 29, 2008

Keystone Pipeline Construction Begins

Construction on the $5.2 Billion Keystone oil pipeline has begun.

This is of interest to Alaska Gas Pipeline fans because Keystone is a partnership between TransCANANDA and ConocoPhillips. The same two companies are now poised to be be rivals in the construction of the Alaska Gas Pipeline.

Take a look at the poll on the right. Do you think TransCANADA and ConocoPhillips will eventually be partners on the Alaska Gas Pipeline?

Wednesday, May 28, 2008

State of Alaska Provides Details of Gas Line Analysis

The State of Alaska has released a lengthy document titled "Written Findings and Determination by the Commissioners of Natural Resources and Revenue for Issuance of a License under the Alaska Gasline Inducement Act (AGIA)"

Appendix G1 covers NPV (Net Present Value) Analysis

Appendix K should make for good reading, it's titled "Expected Returns and Approval Economics"

Terminology warning - TransCANADA is now called "TC".

Sunday, May 25, 2008

Former Governor Endorses All-Alaska Gas Pipeline

Not every Alaskan is in lock step with Sarah Palin's approval of the TransCanada Alaska Gas Pipeline proposal (or "TC" as she calls it).

Former Republican Alaska Governor, and one time Palin supporter Walter Hickel had wrote this commentary advocating an All Alaska, All American gas line. He says it makes sense.

Hickel is focused on the idea of selling the Alaska LNG to China, but the reasoning and economics are sound regardless of who buys the LNG.

At a minimum an All Alaska, All American gas line would not hinge on approval by a foreign government. At the moment the Canadians are having a hard time getting their own arctic gas line approved and built (Mackenzie Pipeline Delays article link).

Palin is big on touting the commitments embedded in the TransCANADA proposal, but TransCANADA can't commit the Canadian Government to approve the pipeline.

Here's a link to Halcro's dissection of Sarah Palin's (SP) Plan.

Thursday, May 22, 2008

Predictable Palin Promotes TransCanada

"May 22, 2008, Anchorage, Alaska – Governor Sarah Palin, Department of Natural Resources Commissioner Tom Irwin and Department of Revenue Commissioner Patrick Galvin today released the AGIA Findings and Determination of the natural gas pipeline project as proposed by TransCanada Alaska Company, LLC and Foothills Pipelines Ltd. (TC Alaska) to the State of Alaska.

The commissioners’ conclusion and analysis of the natural gas pipeline project proposed by TC Alaska is that it merits issuance of the AGIA license because it maximizes the benefits to Alaskans."

In addition to promoting the TransCanada project, the Governor says the TransCanada pipeline makes a "Y" line or spur line possible for a future Liquefied Natural Gas (LNG) project.

The Governor also made a point to downgrade the ConocoPhillips/BP Denali gas pipeline.

Next stop - The legislature has 60 days to pass a bill approving the issuance of the license.

We'll see how this next step goes. It will take some time to digest the press release.

Tuesday, May 13, 2008

Saturday, May 10, 2008

Enstar Advances Bullet Line Plans

Enstar announced plans for the Bullet Line to South Central Alaska.

For comparison purposes, the large bullet on the left represents the ConocoPhillips / BP Denali Alaska Gas Line, with the Enstar Bullet line shown on the right.

The TransCanada - AGIA pipeline is not pictured.

Asking the Hard Questions

Representative Ralph Samuels, Legislative Budget and Audit Committee Chairman is asking for TransCanada to explain their rate of return assumptions.

Follow this link to his May 3, 2008 Letter to TransCanada

It's good to see that TransCanada is receiving a high level of scrutiny prior to the Governor's AGIA announcement on May 19th.

Thursday, May 8, 2008

Enbridge to Join Denali Pipeline?

Pipeline Company Enbridge may join ConocoPhillips and BP on the Denali Gas Pipeline according to the Edmonton Journal.

It's good to see market alternatives to the TransCanada Alaska Gas Inducement Act (AGIA) proposal.

Look forward to Alaska Governor Sarah Palin's endorsement of the TransCanada bid later this month. The endorsement includes $500,000,000 in incentives.

Saturday, May 3, 2008

A Detailed Look at the Point Thomson Decision

The Alaska Journal of Commerce has a detailed analysis of the recent decision of State Natural Resources Commissioner Tom Irwin rejecting ExxonMobil's development plan for Point Thomson.

Here's a link to the decision

This decision is key in understanding the relationship between the North Slope producers and State of Alaska.

Irwin's comments were not focused on the technical or economic details of plan. The comments seemed focused of a perception that Exxon would not keep it's end of the deal. It's a bad sign that the State cannot work with the producers and hammer out deals that put people work and get the gas flowing.

For the time being only lawyers are working on the Point Thomson project.