Gas producers and developers of the proposed Alaska natural gas pipeline announced an agreement yesterday to complete $500 million in final design and engineering work on the troubled project.
But the announcement left the two sides far apart on financing the project's $20-$25 billion construction cost, and Energy Department officials did not rule out the possibility that additional financial backing may be sought, either from the federal government or from the pipeline's prospective gas customers.
"There is still much to be done by the companies before this very large undertaking can be completed. But the agreements signed today are a major step forward," Energy Secretary Charles W. Duncan Jr. said yesterday.
The Energy Department still believes the project can be privately financed, said department general counsel Lynn Coleman. But when asked whether support from taxpayers or consumrs may be needed, he said the question is "premature." Privately, the department has been seeking congressional reaction to a change in the project's financial plan that would permit pipeline companies to charge some of the construction costs to their customers.
The developers, seven pipeline companies which formed the Alaska Northwest Natural Gas Transortation Co. consortium, won a hard-fought competition against other potential builders by pledging that the project could be financed entirely by private borrowing.
The consortium could not raise the funds, however, and has been forced to turn to the gas producers for construction assistance.
Yesterday's announcement was the first joint step forward by the sponsoring pipeline companies and the producers -- Atlantic Richfield Co., Exxon Corp. and Sohio. In a carefully crafted statement, the companies said they would try to agree on a financing plan to permit the project's completion by 1985.
"That is about all that either party was willing to state," said John G. McMillian, head of the Northwest consortium.
The energy companies are willing to make a "substantial" financial contribution to the project's construction costs, "provided they are not placed in the position of becoming, in effect, the ultimate guarantors of completion . . . and provided that their financial exposure is effectively limited," the statement said.
There has been no progress, McMillian said, in deciding how much control the energy companies should receive in exchange for helping fuild the pipeline. t
Left unanswered yesterday was the question of who will guarantee the project's completion, and the longer the issue is unresolved the greater the pressure on Congress to answer it, said sources close to the negotiations.
The statement alos appears to fall far short of Canadian demands for firm assurances that the difficult Alaskan leg of the project will be built. A failure to complete the project could leave Canada stuck with an expensive pipeline network that does not reach the North Slope gas fields, Canadian officials fear.
Canada has been pushing hard for guarantees of the project's completion.