TransCanada | Northwest Coast Energy News

Four energy giants update multi-billion dollar Alaska LNG development plans

An alliance of four energy companies has updated plans for a multi-billion dollar, ten-year liquefied natural gas megaproject that would take gas from Alaska’s North Slope for shipment to Asia through the oil port at Valdez.

Three of the companies, Exxon Mobile, ConocoPhillips and BP already have operations on the North Slope. TransCanada,which is already planning to build a gas pipeline for the Kitimat Shell project, would be the fourth partner and also work on the pipeline.

The four companies filed a letter on October 1 with Alaska Governor Sean Parnell outlining the plans, The governor’s office released the letter today.

The companies told Gov. Parnell that their efforts would result in “a megaproject of unprecedented scale and challenge; up to 1.7 million tons of steel, a peak construction workforce of up to 15,000, a permanent workforce of over 1,000 in Alaska, and an estimated total cost in today’s dollars of $45 to $65+ billion.”

The letter goes on to say that TransCanada’s recently completed non-binding solicitation of
interest in the project and that company “has publicly reported interest from potential shippers and major players from a broad range of industry sectors and geographic locations.” (An expression of interest, of course, doesn’t mean that buyers will actually sign contracts, as the Kitimat LNG partners are finding out)

It appears from the letter that the North Slope producers are, in the long term, worried about diminishing oil reserves and are now, like energy companies around the world, looking at cashing in on the natural gas boom.

This opportunity is challenged by its cost, scale, long project lead times, and reliance upon interdependent oil and gas operations with declining production. The facilities currently used for producing oil need to be available over the long-term for producing the associated gas for an LNG project. For these reasons, a healthy, long-term oil business, underpinned by a competitive fiscal framework and LNG project fiscal terms that also address AGIA issues [an Alaska state agency], is required to monetize North Slope natural gas resources. The producers look forward to working with the State to secure fiscal terms necessary to support the unprecedented commitments required for a project of this scope and magnitude and bring the benefits of North Slope gas development to Alaska.

Over the past few months, the partners have, according to the letter:

•Developing a design basis for the pipeline, including areas of continuous and discontinuous permafrost
•Investigating multiple ways to remove and dispose of CO2 and other contaminants
•Assessing use of existing and addition of new Prudhoe Bay field facilities
•Mapping multiple pipeline routing variations
•Assessing multiple pipeline sizes
•Providing for at least five in-state gas off-take points
•Completing preliminary geohazard and marine analysis of 22 LNG site locations
•Developing a design basis for the required LNG tanker fleet
•Evaluating multiple LNG process design alternatives
•Confirming a range of gas blends from the Prudhoe Bay and Point Thomson fields can generate a marketable LNG product

The letter concludes:

Our next steps are to complete the concept selection phase and work with the State to make meaningful progress on the items detailed above. This work is critical as we consider decisions to progress the next phases of an LNG development project.

Alaska’s North Slope natural gas resources must compete in the global energy markets in order to deliver state revenues, in-state energy supplies, new job opportunities and other economic benefits to Alaskans. While North Slope gas commercialization is challenging, working together, we can maintain the momentum toward our shared vision for Alaska. We will continue to keep you advised of our progress and stand committed to work with the State to responsibly develop its considerable resources.

Alaska LNG fact sheet — A fact sheet on the Alaska LNG project sent to the state governor by the project partners.

LNG partners letter to Alaska governor (PDF)

TransCanada to hold community briefing in Kitimat October 15

TransCanada will hold a community briefing in Kitimat on October 15, 2012, at Riverlodge to inform residents of its plans for its subsidiary Coastal GasLink Pipeline, which would carry natural gas for the Royal Dutch Shell LNG project.

In a letter to District of Kitimat Council, TransCanada said it the Kitimat would be one of several sessions across northern British Columbia.

The public information session will include maps “showing our conceptual route as well as information on community benefits, environmental management and other aspects of our project. Coastal Gaslink project representatives will be available to answer questions and share information.”

The session will be a the Riverlodge Rescreation Centre from 4:30 p.m. to 8:30 p.m. On October 15.

TransCanada to build Shell’s “Coastal Gaslink” natural gas pipeline to Kitimat

Shell Canada and its Asian partners have chosen TransCanada Corporation to design, build, own and operate the proposed natural gas pipline to Kitimat, now called the Coastal GasLink project.

The estimated $4-billion pipeline will transport natural gas from the Montney gas-producing region near Dawson Creek, in northeastern British Columbia to the proposed natural gas export facility at Kitimat, BC.

The LNG Canada project is a joint venture led by Shell, with partners Korea Gas Corporation, Mitsubishi Corporation and PetroChina Company Limited.

A news release from TransCanada says “Shell and TransCanada are working toward the execution of definitive agreements on the Coastal GasLink project.”

In the release, Russ Girling, TransCanada president and CEO says:

Our team has the expertise to design, build and safely operate pipeline systems. We look forward to having open and meaningful discussions with Aboriginal communities and key stakeholder groups, including local residents, elected officials and the Government of British Columbia, where we will listen to feedback, build on the positive and seek to address any potential concerns. Coastal GasLink will add value to British Columbians, particularly Aboriginals and communities along the conceptual route, by creating real jobs, making direct investments in communities during construction and providing economic value for years to come.

TransCanada says the company has approximately 24,000 kilometres of pipelines in operation in western Canada including 240 kilometres of pipelines in service in northeast BC. Another 125 kilometres of proposed additions either already having received regulatory approval or currently undergoing regulatory review. These pipelines form an integral and growing part of TransCanada’s NOVA Gas Transmission Ltd. (NGTL) System, which brings natural gas from Alberta to British Columbia to a hub near Vanderhoof.

Girling said in the release:

TransCanada is a leading energy infrastructure company in North America, with a 60-year history of safe, efficient and reliable operation of our assets and a respect for the communities and environments where we operate. We appreciate the confidence that Shell and its partners have placed in us to build, own and operate this natural gas pipeline in British Columbia. We will work collaboratively with them, Aboriginals and other stakeholders as we launch into the initial phases of consultation and regulatory review.

Project parameters

In it’s release TransCanada describes the potential Coastal GasLink pipeline project this way:

Receipt point: Near Dawson Creek, BC
Delivery point: Proposed LNG Canada facility near Kitimat, BC
Product: Natural gas from BC’s abundant Montney, Horn River and Cordova basins and elsewhere from the Western Canada Sedimentary Basin
Length of route: Approximately 700 kilometres of large diameter pipe
Initial pipeline capacity: In excess of 1.7 billion cubic feet of gas per day
Anticipated jobs: Estimated 2000-2500 direct construction jobs over a 2- during construction 3 year construction period
Estimated cost: Detailed cost information will be developed following completion of project scoping and planning. The current estimate is approximately $4 billion
Regulatory process: Applications for required regulatory approvals are expected to be made through applicable BC provincial and Canadian federal processes
Estimated in-service date: Toward the end of the decade, subject to regulatory and corporate approvals

Pipeline route

TransCanada says: “The final pipeline route will take into consideration Aboriginal and stakeholder input, the environment, archaeological and cultural values, land use compatibility, safety, constructability and economics.:

The Pacific Trails Pipeline would go cross country to Kitimat. (PTP)

At this point there are two possible routes for the pipeline west of Vanderhoof. One route would be to follow the existing Pacific Northern Gas route that roughly parallels Highway 16. The second possibility is a cross-country route, which may lead to controversy. The Pacific Trails Pipeline, which would feed the KM LNG partners (Apache, Encana and EOG) goes across the mountains from Smithers. While the PTP project has the approval of most First Nations in the regions, Apache and PTP are still in negotiations with some Wet’suwet’en houses over portions where the pipeline would cross the traditional territory of the houses. The much more controversial Enbridge Northern Gateway pipeline follows a similar cross-country route and faces much stiffer opposition than the Pacific Trails Pipeline, due to the content of that pipeline, mainly diluted bitumen and because, critics say, Pacific Trails managed to secure the most geologically stable cross country route earlier in this decade when the pipeline was originally planned to import, not export, natural gas.

TransCanada says the Coast Gaslink pipeline will also have an interconnection with the existing Nova Gas (NGTL System and the liquid NIT) trading hub operated by TransCanada. The company says:

A proposed contractual extension of TransCanada’s NGTL System using capacity on the Coastal GasLink pipeline, to a point near the community of Vanderhoof, BC, will allow NGTL to offer delivery service to its shippers interested in gas transmission service to interconnecting natural gas pipelines serving the West Coast. NGTL expects to elicit interest in and commitments for such service through an open season process in late 2012.

That means that the Asian customers will not be just dependent on natural gas from northeast British Columbia. Instead the “molecules” of natural gas from Alberta will join the stream heading to Kitimat. “Open season” in the energy industry is an auction where potential customers or transporters bid for use the pipeline.

In the release Girling says:

The potential Coastal GasLink pipeline project will allow British Columbians, and all Canadians, to benefit from the responsible development of valuable natural gas resources and will provide access to new markets for that gas. The project will also create substantial employment opportunities for local, skilled labourers and businesses as part of our construction team,” concluded Girling. “We know the value and benefits that strong relationships in British Columbia can bring to this project and we look forward to deepening those ties as our extensive pipeline network grows to meet market and customer needs.

TransCanada Corp. is no stranger to controversy, the company is the main proponent of the Keystone XL pipeline from Alberta to the US Gulf Coast. Portions of that pipeline were put on hold by President Barack Obama pending further review and Keystone has become a hot issue in the current American presidential election.

TransCanada says it will reapply to build Keystone XL pipeline

TransCanada has issued a statement saying that it will apply to the United States government to build the Keystone XL pipeline from the Alberta bitumen sands to Texas.

The statement reads, in part:

This outcome is one of the scenarios we anticipated. While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL. Plans are already underway on a number of fronts to largely maintain the construction schedule of the project,” said Russ Girling, TransCanada’s president and chief executive officer. “We will re-apply for a Presidential Permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014.”

TransCanada expects that consideration of a renewed application will make use of the exhaustive record compiled over the past three plus years.

“Until this pipeline is constructed, the U.S. will continue to import millions of barrels of conflict oil from the Middle East and Venezuela and other foreign countries who do not share democratic values Canadians and Americans are privileged to have,” added Girling. “Thousands of jobs continue to hang in the balance if this project does not go forward. This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed.”

TransCanada will continue to work collaboratively with Nebraska’s Department of Environmental Quality on determining the safest route for Keystone XL that avoids the Sandhills. This process is expected to be complete in September or October of this year.

TransCanada has committed to a project labour agreement with the Laborers International Union of North America, the International Brotherhood of Teamsters, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, the International Union of Operating Engineers and the Pipeline Contractors Association. Any delay in approval of construction prevents this work from going to thousands of hard-working trades people.

TransCanada’s investment of billions of private dollars would create thousands more jobs in the U.S. manufacturing sector. The company has contracts with over 50 suppliers across the U.S.. Manufacturing locations for Keystone XL equipment include: Texas, Missouri, Pennsylvania, Michigan, Oklahoma, South Carolina, Indiana, Georgia, Maryland, New York, Louisiana, Minnesota, Ohio, Arkansas, Kansas, California and Pennsylvania. The benefits these companies and the people of their states continue to be delayed and the negative impacts will be felt.

Girling adds TransCanada continues to believe in Keystone XL due to the overwhelming support the project has received from American and Canadian producers and U.S. refiners who signed 17 to 18 year contracts to ship over 600,000 barrels of oil per day to meet the needs of American consumers.

Obama adminstration rejects Keystone XL pipeline, TransCanada can reapply

The US State Department has rejected the application from TransCanada to build the Keystone XL from the Alberta bitumen sands to Texas. But the door is open for TransCanada to reapply for a permit, using a new route.

Soon after the announcement from Washingon, Prime Minister Stephen Harper issued a statement saying that President Barack Obama called Harper to let him know abut the decision. Harper’s release expresses his “profound disappointment” with the decision.

In a news conference, Natural Resources Minister Joe Oliver told reporters that the decision was disappointing and “in the best interests of both countries.” Oliver said the process is not over and he hoped that the Keystone project will “eventually approved on its merits.”

He said: “The responsible development of the oil sands…is expected to create thousands of jobs and bring significant economic benefits.”

He added that the Obama decision underlined the importance of diversifying the energy market, especially to Asia.

The State Department says.

Today, the Department of State recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest. The President concurred with the Department’s recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest…

On December 23, 2011, the Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 (“the Act”). The Act provides 60 days for the President to determine whether the Keystone XL pipeline is in the national interest – which is insufficient for such a determination.

The Department’s denial of the permit application does not preclude any subsequent permit application or applications for similar projects.

The White House issued a statement saying:

Earlier today, I received the Secretary of State’s recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree.

This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I’m disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security –including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico – even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.