Exxon and TransCanada have announced a partnership to continue preliminary work on a possible gas pipeline from the North Slope. Naturally, Alaskans are wondering what this development means.
Here's our best assessment:
Does this mean Exxon and TransCanada are actually going to build a gas line?
No, that's still a long way off. This step is a partnership to do the planning that's needed to hold an "open season" for the project next year. ("Open season" is a formal process where the sponsors find out who is interested in shipping gas through the line.) To attract shippers in the open season, the project needs the best possible cost estimates so shippers will know what rates they have to pay.
A final decision on building a gas line won't come for several years, when corporate boards agree to commit billions of dollars either to gas shipping contracts or to actual construction of a line.
Then why is this news such a big deal?
For the first time, one of the Big Three gas holders on the North Slope says it's willing to work within the rules the state established for the project. Exxon apparently sees that following the state's preferred path will be the quickest way to get a gas line built.
Having Exxon aboard means the project will have better cost estimates to use in attracting shippers. The gas line, while still a long way off, is moving forward with the world's biggest corporation aboard.
To read the complete editorial, visit The Anchorage Daily News.