TransCanada Corp. (NYSE: TRP), a Canadian oil pipeline company, had been planning a pipeline from the North Slope in Alaska to Alberta, Canada.
For timely approval, the company needed to get a certificate from the Federal Energy Regulatory Commission by October.
But on Wednesday, Alaska gave the company permission to change its focus.
In March, TransCanada announced a new plan for a liquefied natural gas pipeline that could export the product overseas.
Commissioners from Alaska Revenue and Natural Resources changed the certificate deadline for the Alberta pipeline until 2014—all the work that has been done so far will be maintained and held until the new date.
The pipeline had started to put a strain on the company, says Kurt Gibson, director of the Alaska Pipeline Project Office, and a new focus was necessary:
“The challenge to this project is it’s so big and moves so slowly because of its size—and the costs and risk associated with it—that by the time it generates some momentum, the market conditions have changed.”
The size and destination for the pipeline have yet to be determined, but Gibson said this preliminary work should be complete by September.
Since 2008, TransCanada has had exclusivity in natural gas pipelines in Alaska. It still maintains this contract, but it will team up with BP, ConocoPhillips, and Exxon Mobil to sell the liquefied natural gas that the pipeline will ship.
According to Alaskan Governor Sean Parnell, this sort of overseas shipment is necessary for Alaska to stay in the LNG market. The abundance of natural gas produced in states like North Dakota is enough for domestic production and would exclude Alaska from that market.
The North Slope contains an estimated 35 trillion cubic feet of natural gas. The new pipeline would allow exports to the Pacific Rim.
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