Port Authority joins with Mitsubishi for ‘all-Alaska’ line
Published Saturday, June 21, 2008
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Stumble It!ANCHORAGE — The Alaska Gasline Port Authority announced Friday that it has formed a partnership with the Japanese company Mitsubishi Corp. on its “all-Alaska” natural gas pipeline proposal.
Port authority project manager Bill Walker said the group has signed a memorandum of understanding with Mitsubishi after discussions lasting almost a year.
“They’re prepared to assist in advancing the project,” he said.
Walker said the company has committed an undisclosed amount of money to the project and agreed to share its expertise and relationships to help develop it.
Mitsubishi has operations in metals, machinery and other industries, and is involved in the production and transportation of liquefied natural gas.
According to Walker, the company has participated in the Kenai liquefied natural gas export project for the last 40 years and handles half of all Japanese LNG imports.
Walker described the new partnership to state lawmakers Friday in Anchorage as part of the Legislature’s review of the TransCanada natural gas pipeline proposal.
The port authority competed against TransCanada in the bidding process established by the Alaska Gasline Inducement Act, but failed to submit a complete application on time. The group has recently offered its conditional support for the TransCanada proposal.
On Friday, Walker explained that the port authority is still seeking two commitments from TransCanada and Gov. Sarah Palin’s administration regarding an LNG component to the Canadian project.
TransCanada has agreed to build a pipeline to Valdez if there is sufficient demand for an LNG project at the first open season or opportunity for shippers to commit gas to the pipe. Walker wants a commitment that the company would build the line if gas was committed in a second or third open season.
The port authority also is seeking a promise that if there’s enough gas for both lines, the Alaska leg wouldn’t be held up by any delays on the Canadian side.
Walker said he has not yet received those commitments from the two parties.
At Friday’s hearing, an economist hired by the Legislature to study the LNG option presented his findings that LNG could compete with a pipeline under certain price scenarios.
But the economist, Barry Pulliam of Econ One Research, also warned that the port authority would have a hard time getting the necessary export license to make the project work.
“I think you need to focus on this particular risk issue pretty hard,” he said.
Walker acknowledged the hurdle but argued the Canadian line also faces hurdles.
When asked why the port authority hasn’t tried to update its 19-year old export license, Walker said port authority officials thought they needed the support of the administration and Alaska residents.
“And we needed someone like Mitsubishi, quite honestly, to be taken seriously,” he added.
Lawmakers have until Aug. 2 to vote on the TransCanada proposal.
Community Discussion
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Yeah, all those years of having to deal with Frank Murkowski and his Chief of Staff- the now convicted felon- Jim Clark, made it tough for the Port Authority. And then there was four years of Knowles whose best buddy was VECO felon Bill Allen who gave $400,000 to Knowles for his special "Governor's Fund". Yikes. What would it have been like for the Port Authority if the head of the executive branch had been working for Alaskans instead of Big Oil?
So does Alaska have enough gas for export? With an estimated 234 trillion cubic feet of gas within the North Slope basin, that provides for a 237 year supply- at 2.7 BCF/D- as the Port Authority has proposed.
With the massive gas reserves Alaska has it is impossible for anyone to credibly argue against Alaskans selling our gas for significantly higher prices in the Asian market. Why shouldn't Alaskans get the best price that we can for the sale of our finite resources? Would the Feds come in and subsidize us for getting less for our gas if we had to sell it to the Canadians for less money? That's crazy.
With the Lower 48 states bursting at the seams with newly found gas deposits there is no way a Canadian pipeline makes any economic sense as proposed.
It looks like reason is starting to prevail.
eat_or_heat.... well said!!
www.fairbanksgas.com
The lowdown48 garbagedump can make plenty of it's own gas by processing it's own garbage properly.
[well.. we could build a small quickie HDPE-gasline to Whitehorse to spread some warmth]
We already have a gas pipeline to Valdez and its
call the transAlaska pipeline; why build another
one, just to create jobs for outsiders? We need
to expand our infrastructure at Prudhoe and
build a deep water port for oil tankers. Then
convert the transAlaska pipeline over to LNG.
We will be able to save money, bring LNG to
market ahead of time and the project will pay
for itself, by not having to build another pipeline.
At the same time, we should convert our utilities
over to LNG, homes, businesses and transportation.
Before the price of gas/diesel shuts us down and
people become despondent. Down the present
road we ware traveling, the State will have to spend
billions later on, to beat the high cost of fuel.
Billions saved now, will be billions more we have
to spend, to make Alaska a better place to live.
We already have a gas pipeline to Valdez and its
call the transAlaska pipeline; why build another
one, just to create jobs for outsiders? We need
to expand our infrastructure at Prudhoe and
build a deep water port for oil tankers. Then
convert the transAlaska pipeline over to LNG.
We will be able to save money, bring LNG to
market ahead of time and the project will pay
for itself, by not having to build another pipeline.
At the same time, we should convert our utilities
over to LNG, homes, businesses and transportation.
Before the price of gas/diesel shuts us down and
people become despondent. Down the present
road we are traveling, the State will have to spend
billions later on, to beat the high cost of fuel.
Billions saved now, will be billions more we have
to spend, to make Alaska a better place to live.
Besides, LNG is not as heavy as crude and we could
do the job with fewer pump stations, saving more
money and we wouldn't have to worry about
clean ups; since liquified LNG would evaporate
into the air. "NO SMOKING" please. And LNG
tanks from all over the world, could come to
fill up with Alaska LNG. We want to do this as
cheaply as possible and not put Alaska in debt.
We could still build a transCanada pipeline, just
to expand our infrastructure to the lower 48,
for tourist and a better road system.
Will someone please tell us who is going to build the intre-structure for pipeline to hook-up the homes all over the borough ? And then at what cost to the homeowner? When GEVA put electric service out to Haystack subdivision, it cost something like $5,000 per household in cash before the installation was done.
I guess if there is one thing that is driving me nuts it is all of the "experts" in such things as construction management, pipeline construction, global economics, etc. Do any of ever think that if this was that easy it would already be done. Consider that TC is one of (if not the) largest pipeline company in the world and this project will cost more than they are worth. Even the entire Permanent Fund would barely, if, cover the cost.
This is a good time to let the free market decide what is best. IF the economics support it, the line will be built to Valdez. If the better choice is to go to Canada/Chicago, so be it. All that really matters is there will be a HUGE amount of money generated for Alaskans regardless of where the gas goes. The money will come from jobs, taxes, and so many secondary sources it couldn't be listed here.
What I am curious about is where is all the Alaska Gasline authority's money coming from. I sure hope we aren't paying to muddy the waters with a ridiculous proposal because Alaskan voters (I didn't vote for it) passed because it "seemed like a good idea at the time".
anchreader:
"This is a good time to let the free market decide what is best"
Doesnt it strike you as odd that the free market is what has artificially inflated fuel prices in the first place? There is one compelling reason to use the port authority; THE ABILITY TO UTILIZE THE RESOURCE IN ALASKA BEFORE EXPORT. Shipping gas thru Canada is a one-way option; out of the ground and gone; therefore a main line to Valdez is the ONLY choice that makes sense.
Anchreader, put up or shut up; Lets see the facts and figures backing your statement "Even the entire Permanent Fund would barely, if, cover the cost." Until you can prove this, keep your comments to yourself.
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