Future bright for Alaska gas line, says board CEO

Posted: Thursday, March 11, 2004

The growing world market for natural gas promises a bright future for a gas pipeline project in Alaska, the head of the Alaska Natural Gas Development Authority said Wednesday. The comments came a few days ahead of an important public meeting of the authority board scheduled in Kenai on Monday.

ANGDA was created in the wake of a 2002 voter initiative to pursue a pipeline project to bring North Slope gas to tidewater at Valdez. That project would include a spur line to bring gas to the Cook Inlet basin.

Harold Heinze, ANGDA's CEO, said that considering the momentum in the natural gas industry around the world, the authority's project enjoys distinct advantages over competing pipeline concepts.

"The LNG (world) trade is undergoing tremendous dynamics," he said, adding that the authority's pipeline concept to follow the trans-Alaska oil pipeline route puts it several steps ahead of other projects in terms of permitting.

"This project has been studied for a number of decades," he said. "From a permitting point of view, it makes it significantly easy to do. Further, he added, "People want to do this."

An ANGDA project also would enjoy tax and financing advantages that could lower costs, Heinze said.

Asked how he saw the ANGDA project faring now that competing pipeline projects are in the field, Heinze said the board feels their project is "in the game."

Other pipeline projects have been proposed, including one by a consortium of ConocoPhillips Alaska, BP Exploration Alaska and ExxonMobil Alaska Production, and another by MidAmerican Energy Holding Co. Both would build pipelines to the Lower 48 through Canada more or less along the route of the Alaska Highway.

The gas authority board meeting is scheduled from 9 a.m. to 5 p.m. Monday at the Homer Electric Association board room in Kenai. However, during the earlier part of the day, the board is scheduled to tour gas facilities in Nikiski. Heinze said the board normally takes public testimony at the top of its meetings, but because of the tour, public testimony will be taken from 3 to 5 p.m. Monday.

The board is expected to hear reports from various consultants doing research work for ANGDA.

The Anchorage-based company Northern Economics is to report on development of a model for analyzing the benefits of the gas line project to Alaska. A lawyer from the Washington, D.C., firm of Morrison and Foerester will report on issues related to the ANGDA project's tax status, specifically how free it might be from federal income taxes. Any savings, Heinze said, would be passed on to future consumers. The board also will hear estimates of the capital costs of the project.

Heinze said ANGDA was focused "on meeting the needs of Alaska and Alaskans."

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