The speaker of the State House does not have encouraging news on prospects for an Alaska gas pipeline. In an address to the Fairbanks Chamber of Commerce yesterday, Speaker Mike Chenault of Kenai said the state is bound by the AGIA contract with Trans Canada and Exxon Mobil and cannot pursue another large diameter gas line without facing triple damages.
Chenault sponsored a bill that funded state investigation of a small diameter in state line that fits under a volume cap in AGIA, but told chamber members there are other obstacles to any pipeline project.
Chenault said the state should not invest billions in an Alaska gas line without confirmed gas sellers and buyers. Chenault said a North Slope gas supply is a problem, and the Alaska Oil and Gas Conservation Commission would not approve gas export if the state had a pipeline ready right now.
Gas is currently re-injected to increase pressure and oil output from the Prudhoe Bay reservoir.
Chenault said nearby Pt. Thompson holds great prospect for gas, but it’s unclear until further exploration takes place how much oil or high value gas condensate would have to be developed there before gas could be pumped out. Chenault says he will continue to push for the in state North Slope to Southcentral line being pursued by the Alaska Gasline Development Corporation, but is not turning his back on the AGIA export line to Canada.
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