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An oil transit pipeline runs across the tundra to a flow station at the Prudhoe Bay oil field on Alaska's North Slope. (AL Grillo/AP)
An oil transit pipeline runs across the tundra to a flow station at the Prudhoe Bay oil field on Alaska's North Slope. (AL Grillo/AP)

Enbridge says Alaskan pipeline could be ready by 2020 Add to ...

Enbridge Inc. is turning its eyes north to Alaska, entering talks with the state to build an $8-billion (U.S.) natural gas pipeline there if a competing project falters.

The Calgary energy company and the state-owned Alaska Gas Development Corp. (AGDC) “are undertaking substantive and exclusive discussion” which would see Enbridge become the builder and operator for the 1,163-kilometre pipeline. It would carry natural gas from the North Slope to Fairbanks and other communities in southern Alaska.

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“Assuming that the project meets all required milestones, receives the necessary commercial commitments, meets all regulatory requirements, and is selected as the state’s preferred alternative, we anticipate the pipeline could begin service in 2020,” the company said in a statement Thursday.

However, Enbridge is in a queue behind TransCanada Corp. – and its partners, Exxon Mobil Corp., BP PLC and ConocoPhillips Co. – who have been working with the state on a $65-billion plan to build a larger pipeline and natural gas liquefaction plant for LNG exports from Alaska to global markets.

Alaska has been struggling to gain market access for shut-in North Slope gas reserves, after an earlier pipeline project to the lower 48 states through Canada was cancelled due to the shale gas boom which drove down prices.

In January, Governor Sean Parnell announced a new agreement with TransCanada and its producer partners for the pipeline project that would supply the Alaskan market and support the LNG export project.

The AGDC signed an agreement last week with TransCanada and its partners signed an agreement last week to proceed with pre-engineering phase.

“TransCanada is pleased that all of the parties to the [Alaska] agreement have achieved another milestone and are now proceeding with the next phase of the project,” company spokesman Davis Sheremata said in an e-mailed statement Thursday. “We look forward to working with our partners on this important and challenging project.

In the coming weeks, the TransCanada-led project will begin to work to secure an LNG export license with the U.S. Department of Energy, and will continue permitting work with the Federal Energy Regulatory Commission. Each producer party, in addition to the state, will begin to engage the LNG sales market during this phase.

But the producers face an increasingly competitive LNG market in Asia, with British Columbia, Australia, Russia and other U.S. producers looking to serve that market. Enbridge’s project is not dependent on an LNG facility.

Follow on Twitter: @smccarthy55

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