TransCanada Expands Crude Pipeline Plans

As the plans for Alaskan Gas Pipeline come together, TransCanada is expanding their crude oil pipeline plans.

The proposals line will carry 750,000 bpd from Albert to refineries in Texas.

Doing the math - 750,000 bpd equals the consumption of 900 MMSCFD of Alaska gas ~ 20% of the planned 4,500 MMSCFD planned for the Alaska Gas Pipeline.

ConocoPhillips Hopes ExxonMobil will Join Denali Pipeline

Conoco CEO Jim Mulva indicates that Conoco is work towards the day when ExxonMobil joins the Alaska Gas Pipeline, dubbed "Denali Pipeline" by partners ConocoPhillips and BP.

When Exxon joins the project it will pretty much rule out other project possibilities and start driving the forward with the momentum of all three major North Slope Producers.

With all three North Slope Producers on board the final key to the project will be some sort of partnership with TransCanada.

Point Thomson Plan Rejected - Again

"We can't risk continued delays in development." says Kevin Banks, director of the Department of Natural Resources oil and gas division, in this Dallas Morning New article.

So rather than approve the plan and start the work - The State is complaining that there is no commitment and they head back to court. Probably the most flawed logic on record.

These are the same folks that are making the Alaska Gas Pipeline decisions for the State - Wow. Here's the link to the news release by the state.

ExxonMobil plans to appeal this latest decision.

Gas Price Headed to $12 - $14 /MMBTU

So says my favorite Okie - T. Boone Pickens.

Maybe high gas prices will drive Alaska and the North Slope Producers to get busy and start building the Alaska Gas Pipeline.

More on gas pricing by Wood Mackenzie.

Gas is still cheaper than oil. On a BTU basis gas at $21.87/MMBTU would be equal to $120/bbl oil.

LNG Demand Growth Predicted

Of course Tar Sand development is the big driver for Arctic gas development, but ExxonMobil sees demand for gas and LNG to increase substantially.

ConocoPhillips VP Speaks On Gas Value

Will Hussey, ConocoPhillips senior vice president for origination see the floor price of natural gas equal to $7/MMBTU.

In rough terms this indicates that ConocoPhillips values the 4,500,000,000 SCFD of Alaska natual gas at $11,340,000,000/year.

Assuming 1,200 SCF gas / barrel of tar sands produced the price of gas adds $8.40/barrel of $115 tar sand oil, or about 7%.

These figures give some context to the value and rate of return for the Denali Pipeline. The value of the gas looks like it will offset the cost of building the pipeline.

Quiet Week

Too quiet in fact. Not a peep out of the Alaskan politicians and Federal Pipeline Coordinator Drue Pearce.

There was one Alaska Gas Pipeline / Denali Pipeline gloom and doom article this week. A former Canadian regulator predicts a long road ahead for the Denali pipeline. It's probably true - it's going to take a lot of work and some political will to make this pipeline a reality.

Meanwhile the world marches on - LNG from Africa is docking in Texas and the price of oil is up around $115/bbl.

Over the long term high oil prices will drive tar sand development and construction of the Alaska gas pipeline.

Thanks for your poll votes - looks like the Denali Pipeline is a hit.