TransCanada Corp would offer equity stakes in its $41 billion Alaska gas pipeline to companies proposing a rival project, but there have been no talks to date, a TransCanada executive said on Tuesday.
BP Plc and ConocoPhillips , two of three major Alaska North Slope gas producers, have proposed the Denali gas pipeline as an alternative to TransCanada's project.
The Houston Chronicle, quoting an unnamed source, reported the Denali partners were in early discussions to joint TransCanada's project.
I have nothing new to report, Tony Palmer, vice-president of Alaska development for TransCanada, told Reuters.
The company has said it would offer equity stakes in the immense project to would-be shippers if they agree to back the pipeline, which would extend 1,700 miles to the Alberta gas grid from Alaska's North Slope.
TransCanada would consider giving stakes in its project to Denali's sponsors, but not their pipeline company, Palmer said. BP and ConocoPhillips are major potential shippers on any pipeline out of Alaska. So those are the parties that we would be offering equity to -- someone that has gas that wants to be a shipper.
A Denali spokesman was not immediately available for comment.
TransCanada is currently in the midst of an open season to gauge shipper support for its 4.5 billion cubic feet a day project.
The pipeline, which has the backing of the other major North Slope gas producer, Exxon Mobil Corp , could cost as much as $41 billion.
TransCanada's proposal was selected by the state government under its Alaska Gasline Inducement Act, which made it eligible for $500 million in state money.
The Denali project would take a similar route. The company is planning its own open season starting July 6.
It is doubtful that both projects would be built to tap the 35 trillion cubic feet of reserves in the North Slope region. The earliest one of them could be in service is estimated to be 2020.
Such a project has been envisioned since the 1970s, but high costs, political uncertainty and now weak natural gas prices have kept it on the drawing board.
Palmer said it was too early to say if BP's troubles with the oil spill in the Gulf of Mexico could prompt it to negotiate a deal in Alaska.
Some folks believe that what's happened in the Gulf is positive for the gas business and some people think it's just negative for the oil and gas business generally, he said.
(Reporting by Jeffrey Jones and Scott Haggett; editing by Peter Galloway)