At 2 p.m. Alaska time, TransCanada's 90-day "open season" will conclude and a company official in Houston will begin opening bids for space in the proposed 48-inch diameter line -- assuming any bids arrive.
If they do, their contents will remain trade secrets for at least five months, if not forever. But within an hour or so after the bids are read, TransCanada's vice president for the Alaska project, Tony Palmer, plans to give a brief statement to reporters.
Palmer has cautioned Alaskans to not expect much information for the time being. Most likely, he said, he will not give any firm indication about whether there's a TransCanada pipeline in Alaska's future. If no bids are received, Palmer said, he will report that fact.
A gas pipeline has long been seen as muscular engine for Alaska's future economy, but for 40 years the cons of construction have outweighed the pros, leaving huge reserves of natural gas in the ground.
Interest among the North Slope companies revived in the past decade when natural gas prices rose somewhat. And there's been more urgency in Alaska of late, as easily tapped Cook Inlet gas fields have played out and North Slope gas could relieve energy pressures in the Railbelt for years to come.
With so much at stake, gas has been growing in importance as a political issue, with pipeline proposals dominating the Alaska Legislature in recent years and now looming as a major issue in the governor's race.
TransCanada and partner Exxon Mobil -- a major owner of Prudhoe Bay gas on the Slope -- are operating together as the Alaska Pipeline Project. Their effort is licensed by the state under the 2007 Alaska Gasline Inducement Act, which provides financial and regulatory incentives for a line.
A competing project -- Denali, a partnership of Conoco Phillips and BP -- is operating outside the AGIA framework. Its 90-day open season started this month.
TransCanada's pipeline to Alberta would have an initial capacity of 4.5 billion cubic feet of gas a year, equal to about 7 to 8 percent of total U.S. gas production. The Valdez line, designed primarily to export liquefied gas to Asia, would have an initial capacity of 3 billion cubic feet a day.
TransCanada says it will choose the route based on the interest of bidders. Either route would have several taps along the way for spurs to consumers in Alaska.
The cost: $32 billion to $41 billion for the 1,700-mile line to Alberta, or $20 billion to $26 billion for the 800-mile Valdez line -- not counting the cost of special tankers that would dock in Valdez or a massive gas- chilling plant that would be needed there.
Open season bidders are likely to be companies, government agencies or individuals that own rights to gas. North Slope producers are natural bidders but not the only ones. A bidder could be a third- party broker with a private deal to buy North Slope gas from a producer and another private deal to sell gas to a Lower 48 utility.
Bidders are giving TransCanada proposals to use part of the pipeline capacity, and in doing so, are bidding to pay for part of the pipeline's construction through transportation fees.
Most likely, TransCanada's Palmer said, the bids will be conditional, leading to protracted negotiations. Bidders might ask for an ownership stake in the pipeline as a condition, or special tax breaks from the state. They might want TransCanada to be responsible for construction cost overruns instead of seeing those extra costs added to transportation charges.
Because bidders are competing against each other, and the TransCanada project is competing against Denali, Palmer said the bids need to be kept secret until negotiations are complete and turned into formal commitments. He said he expects negotiations to run through December, with agreements, if any, made public in January.
Eight potential bidders signed confidentiality agreements to study 2,000 TransCanada documents in data centers in Anchorage, Calgary, Whitehorse and Houston, Palmer said.
Ideally, he said, bidders together will account for the entire minimum capacity of the line. If no bidders show up, TransCanada is still committed under AGIA to continue to design and get permits for a pipeline. If that happened, Palmer said TransCanada would try to find out why no one bid, and whether it could change the project to make it more attractive.
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