TransCanada says low prices could impact gas line construction

May 10, 2010

TransCanada VP Tony Palmer says low gas prices could have a big impact on the company's natural gas pipeline plans. (Eric Sowl/KTUU-DT)

by Ted Land
Monday, May 10, 2010

ANCHORAGE, Alaska -- TransCanada says low gas prices could seriously impact its quest to build a natural gas pipeline out of Alaska.

Company Vice President Tony Palmer says he's keeping a close eye on the unpredictable numbers.

This summer, TransCanada crews will be out gathering field data in anticipation of construction, which the company says could happen five years from now.

Palmer's latest update comes during open season, when gas companies are deciding whether to buy space on a potential TransCanada gas pipeline.

"You won't be surprised to hear that those parties are very sophisticated players. They always wait until the last day or two to submit their bids," Palmer said.

They're trying to determine how feasible it would be to use the line; gas prices are a significant deciding factor.

"There are some encouraging signs. However, in the short run, $4 gas prices, for those of us that sit on the side of production and pipelines and so on, is rather depressing," Palmer said.

However, today's gas price is not as important as what it will be in 2020, when TransCanada hopes to have a line up and running.

In the meantime, the company is once again emphasizing its desire to see the project merge with other proposals from BP and ConocoPhillips -- the competition -- which are backing the Denali Pipeline Project.

"This is not a project that we want to do alone," Palmer said.

For its part, Denali says it expects to commence open season on July 6, and will wait for results before deciding how to proceed with its project.

Contact Ted Land at tland@ktuu.com

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