INTERVIEW - TransCanada Seeks Talks with Alaska Gas Producers
Date: 23-Feb-06
Country: CANADA
In an interview, Kvisle said his company, Canada's largest pipeline firm, prefers negotiations with the backers of the planned line. He said he isn't planning legal action to enforce the Canadian right-of-way granted the company under Canada's Northern Pipeline Act, passed nearly three decades ago when the project was initially proposed.
"The resolution of how the pipeline gets through the Yukon and northern (British Columbia) is something we really want to work on and resolve in a commercial sense with the Alaska producers, rather than in any legal way," Kvisle said.
"We think that's how this project will come together."
The planned line took a step forward on Tuesday, when Alaska Governor Frank Murkowski proposed legislation replacing the state's oil-production tax with a profit-linked levy.
The tax plan is backed Alaska's three major producers, ConocoPhillips, BP Plc and Exxon Mobil Corp.
The group, which controls most of the massive gas reserves under Alaska's North Slope, has sought lower taxes on production to reduce the risk of the massive pipeline project.
While the new tax may go some way to convince producers that the fiscal risk of the line is manageable, another key roadblock has been the Canadian regulatory system that will govern the line.
The producer group, along with TransCanada rival Enbridge Inc, has argued the Northern Pipeline Act is out of date and could open the project to potential court challenges if it's used to govern the line's passage through Canada.
The producers have said they want to see the National Energy Board, Canada's energy regulator, hold new hearings on the project, which would open up the route to competition from Enbridge and other pipeline firms.
Kvisle, however, considers the act to be the quickest way to get the line built, since relying on it wouldn't require lengthy hearings.
But he added that convincing the Alaska group to back the company's version of the Alaska Highway project could be done with negotiations. The company wouldn't need to ask the producers to support the Canadian pipeline legislation if they agreed to work with TransCanada.
"It won't require any reaffirmation or de-affirmation of the NPA," Kvisle said. "It's the only way big deals like this, involving so much money and very sophisticated players, get done. And we don't want this project to go back on the back burner and be on hold for a long period of time."
The proposed line would run from Prudhoe Bay on Alaska's northern coast through the Yukon and British Columbia to Alberta, where it would tie into the existing network of natural gas pipelines in Canada and the lower 48 states.