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TransCanada tries again to attract gas line interest

Becky BohrerAssociated Press

JUNEAU -- The holder of an exclusive license to build a major natural gas pipeline in Alaska plans to again gauge market interest in the project.

TransCanada Corp. on Monday announced that it would hold a solicitation of interest from Aug. 31 through Sept. 14. The announcement came hours before a group of lawmakers were scheduled to get an update on efforts to commercialize Alaska North Slope gas -- and two years to the day from which the company ended its first market test.

Terms of TransCanada's agreement with the state require that it gauge market interest every two years. In 2010, the company held an "open season," a three-month period of courting gas producers in an effort to secure shipping agreements. It proposed two options: a pipeline that would run from the North Slope into Canada and serve North America markets and another that would lead to a liquefied natural gas facility that could export fuel by ship.

Through that process, TransCanada said it received multiple bids from "major industry players and others" interested in using a proposed pipeline to transport gas to market. But the process didn't yield any publicly announced shipping commitments for gas, leading some lawmakers and even Gov. Sean Parnell to express frustration with the pace of efforts to bring a gas line to fruition.

Alaskans have long dreamed of a major line as a way to shore-up revenues as oil production declines, create jobs and provide energy for Alaskans. But things have changed since TransCanada received the license in 2008; among other things, gas prices haven't been high relative to oil, and there's been ample gas on the market.

While TransCanada had focused mainly on the Canadian option, Parnell, in an effort to jumpstart progress on a line, last year urged the North Slope's major players to get behind a project that would allow for liquefied natural gas exports to the Pacific Rim if the market had truly shifted away from the Lower 48.

Exxon Mobil Corp. and ConocoPhillips agreed to focus on a large-scale liquefied natural gas project, though it was understood that there was no guarantee that a line would be built.

Those responding to the upcoming solicitation will be able show interest in either type of project. The solicitation will be non-binding. It will provide TransCanada an opportunity to hear from potential customers and see if it's on the right track with a project, said Larry Persily, federal coordinator for Alaska natural gas pipeline projects.

Associated Press