Message-ID: <1550247.1075860885860.JavaMail.evans@thyme> Date: Wed, 2 Jan 2002 17:33:09 -0800 (PST) From: ei_editor@platts.com To: einsighttext@listserv.platts.com Subject: Scaled-back Alaskan pipeline proposal in works Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: 7bit X-From: Energy Insight Editor X-To: EINSIGHTTEXT@LISTSERV.PLATTS.COM X-cc: X-bcc: X-Folder: \Kevin_Hyatt_Mar2002\Hyatt, Kevin\Projects\Tsunami X-Origin: Hyatt-K X-FileName: khyatt (Non-Privileged).pst *Energy Insight News for Thursday, January 3, 2002 Scaled-back Alaskan pipeline proposal in works With prospects for a gas pipeline from Alaska's North Slope looking shakier by the month, Foothills Pipe Lines Ltd. is about to unveil a scaled-down version of the proposed Alaska Highway Pipeline Project that it hopes will win the approval of both regulators and producers. Within the next week, Calgary-based Foothills plans to present North Slope producers with a revised commercial plan costing about $8 billion, approximately half the estimated cost of the existing Alaska Highway plan under consideration, according to TransCanada PipeLines Ltd. CEO Hal Kvisle. TransCanada is a joint partner in Foothills with Vancouver-based Westcoast Energy, which is in the process of being taken over by Duke Energy. Foothills has U.S. and Canadian regulatory permits dating from 1977 to build the Alaska Natural Gas Transportation System, which would run through Alaska along the highway into western Canada and ultimately into the lower-48 states. The new proposal is to build a 42- or 48-inch-diameter pipeline from the North Slope, Kvisle said, across the Yukon and Alberta and into the continental U.S., with initial deliveries of about 2.5 billion cubic feet per day. The three major North Slope producers have said the existing proposal-a 1,700-mile pipeline with capacity for 4 billion cubic feet/day-would cost $17.2 billion. The three North Slope producers-ExxonMobil, BP and Phillips Petroleum-testified at a Senate hearing this fall that the economics of any Alaska-to-lower-48 pipeline were questionable. Kvisle said he hopes a smaller project will persuade the producers to give early backing to the engineering phase and, in the process, see how gas supply and demand unfolds. The dramatic drop in wellhead gas prices this year has fueled concerns that a pipeline from Alaska is no longer economical, Kvisle noted. Still, after examining various pipeline options, the North Slope producers appear to be leaning more toward the Alaska Highway route than they were before, he said. Read the entire story at http://www.energyinsight.com. Also, catch the latest news headlines on Energy Insight Executive, updated twice daily. /////////////////////////////////////////////// Market Brief Wednesday, January 2 (Changes from 12/28) Stocks Close Change % Change DJIA 10,073.40 (63.6) -0.63% DJ 15 Util. 297.74 3.2 1.10% NASDAQ 1,979.25 (8.02) -0.40% S&P 500 1,148.08 (12.9) -1.11% Market Vols Close Change % Change AMEX (000) 130,955 28,748.0 28.13% NASDAQ (000) 1,512,183 189,403.0 14.32% NYSE (000) 1,179,897 274,803.0 30.36% Commodities Close Change % Change Crude Oil (Feb) 21.1 0.69 3.38% Heating Oil (Jan) 0.5507 (0.016) -2.79% Nat. Gas (Henry) 2.555 0.000 0.00% Propane (Jan) 32.60 (1.40) -4.12% Palo Verde (Feb) 24.75 0.00 0.00% COB (Feb) 24.75 0.00 0.00% PJM (Feb) 30.00 0.00 0.00% Dollar US $ Close Change % Change Australia $ 1.942 (0.017) -0.87% Canada $ 1.60 0.005 0.31% Germany Dmark 2.17 (0.048) -2.17% Euro 0.9036 0.020 2.25% Japan ?en 132.2 1.200 0.92% Mexico NP 9.1 (0.080) -0.87% UK Pound 0.6923 0.0023 0.33% Foreign Indices Close Change % Change Arg MerVal 323.69 28.30 9.58% Austr All Ord. 3,383.10 19.30 0.57% Braz Bovespa 13872.09 294.52 2.17% Can TSE 300 7646.79 (28.21) -0.37% Germany DAX 5167.88 7.78 0.15% HK HangSeng 11350.85 (80.74) -0.71% Japan Nikkei 225 10542.62 0.00 0.00% Mexico IPC 6410.05 6371.84 -0.88% UK FTSE 100 5,218.30 29.20 0.56% Source: Yahoo!, TradingDay.com and NYMEX.com ////////////////////////////////////////////// Executive News PacifiCorp halts pursuit of Priest Rapids competitive license bid PacifiCorp, a division of Scottish Power, says that it has signed a power purchase contract for the energy output of Priest Rapids Hydroelectric Project and withdrawn its participation in a competitive license application for the project. PacifiCorp agreed to a contract with Grant Public Utility District No. 2, the current owner and operator of the project, for purchase of a share of the project output when current contracts expire in 2005 and 2009. Grant County Public Utility District said that that it has received power sales contract commitments from all 12 of its current utility power customers as well as 5 additional purchasers in Idaho added as a result of a recent FERC administrative proceeding. The PUD had placed an end-of-year deadline on contract terms. PacifiCorp and the Yakama Indian Nation had announced in August that they were forming a partnership to challenge the PUD for the license. However, in signing the new contract this week, PacifiCorp agreed that it will support Grant PUD's relicensing effort, effectively ending its participation in any challenge. PacifiCorp says that the contract the company has just concluded is more favorable than that previously offered by the PUD. If so, this suggests that the competitive license move may have been a strategy to improved power purchase contract terms. The Yakama Nation has said that it will move forward with the competitive license application despite PacifiCorp's decision to pull out of the partnership. Hence, the PUD's license for the Priest Rapids Hydroelectric Project still is under threat. Williams buys NGL pipeline Williams Energy Partners L.P. has purchased a natural gas liquids pipeline from Aux Sable Liquid Products L.P. for $8.9 million. The transaction is expected to be 2 cents to 3 cents per unit accretive to cash flow on an annualized basis. The 8.5-mile, 8-inch diameter pipeline extends from Aux Sable's gas processing plant in Channahon, Ill., to a petroleum refinery in Joliet, Ill., and another nearby natural gas liquids pipeline. Aux Sable has contracted with the partnership for continued exclusive use of the line being purchased. To subscribe to our Executive News Service, which is updated twice daily, log on to http://www.energyinsight.com, or contact Platt's Direct Response Team at 1-800-424-2908 (if outside the United States call 1-720-548-5700). ///////////////////////////////////////////////