Friday, June 12, 2009
TransCanada and Exxon Mobil, two rivals in a long-running battle over the construction of an Alaskan natural gas pipeline, have agreed to work together, and Alaska Gov. Sarah Palin, who courted TransCanada as an alternative to the big oil companies, praised the agreement.
During last year's election campaign, Palin (R) had held up a deal she forged with TransCanada as an example of standing up to the handful of big oil companies pumping petroleum from Alaska's North Slope. She said the oil companies had dragged their feet. The pipeline issue became more pressing in recent years as oil output from the Alaskan North Slope declined.
Yesterday, Palin issued a statement saying that "the alignment provides a mutual benefit by bringing together the key skills of two world-class companies to effectively advance a project of maximum value and mutual benefit."
Exxon Mobil will share initial development costs with TransCanada -- and will get a portion of the $500 million in reimbursements the state of Alaska earlier promised to give TransCanada to get the project going. TransCanada said it would retain a majority stake in the pipeline, but the companies refused to disclose Exxon's share. The two companies said they would spend $150 million through July 2010, $70 million more than TransCanada previously said it would spend on initial stages.
The pipeline still faces hurdles, including financing. TransCanada Vice President Tony Palmer said he hoped that the $30 billion line might be complete in nine years if all went well. It would carry 4.5 billion cubic feet a day of natural gas over 1,700 miles from Prudhoe Bay on the North Slope to the Canadian province of Alberta.
-- Steven Mufson