Transcanada, Exxon file with FERC for Alaska Pipeline Project, increase cost estimates

The Alaska Pipeline Project announced today that it filed its plan with the U.S. Federal Energy Regulatory Commission (FERC) to obtain approval to conduct the first natural gas pipeline open season to develop Alaska's vast natural gas resources. The project is a joint effort between TransCanada Corporation  (NYSE: TRP) and Exxon Mobil Corporation (NYSE: XOM) to develop a natural gas pipeline under the Alaska Gasline Inducement Act (AGIA).

If FERC approves the plan, the Alaska Pipeline Project will finalize its open season offering and provide it to potential shippers at the end of April for their assessment during the 90-day period through July 2010.

During the open season, the Alaska Pipeline Project will provide information about its terms and conditions to potential natural gas shippers, allowing them to assess their interest in making long-term commitments to reserve capacity on the pipeline.

The open season process initiated with FERC applies to the portion of the project in the United States. A separate but coordinated open season for the Canadian portion of the project will be conducted concurrently with the U.S. open season.

Two Options Included in Alaska Pipeline Project Open Season

Two options will be submitted for shipper assessment in the Alaska Pipeline Project open season. The first option is a pipeline from Alaska's North Slope to Alberta, Canada, a distance of approximately 1,700 miles (2,737 kilometres), where the gas can be delivered on existing pipeline systems serving major North American markets. The second option would transport natural gas from the North Slope to Valdez, Alaska, a distance of approximately 800 miles (1,287 kilometres), where it would be converted to liquefied natural gas in a facility to be built by others and then delivered by ship to North American and international markets.

Both options would provide opportunities for Alaska communities to acquire natural gas from the pipeline from a number of strategically located off-take connections.

Components of both options include a world-class gas treatment plant (GTP) and Point Thomson natural gas transmission pipeline. The GTP would be built next to the North Slope's Prudhoe Bay facilities to treat the gas so it can be shipped on the pipeline. An approximately 58 mile (93 kilometres) pipeline would connect the natural gas supplies of the Point Thomson field to the plant and pipeline.

The results of the open season will determine the preferred development option.

Updated Cost Estimate for Alaska Pipeline Project

Updated cost estimates for the project are in the range of US$32 billion to US$41 billion for the North Slope to Alberta option, and US$20 billion to US$26 billion for the Valdez option. Both options have an expected in-service date of 2020 and would provide either 4.5 billion cubic feet of natural gas per day under the Alberta option or 3.0 billion cubic feet per day under the Valdez option.



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