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The state is offering a set of special natural gas royalty and tax terms as inducements for North Slope producers to sign pipeline capacity contracts during an open season set by TransCanada Corp. that will begin May 1, state officials told state legislators in a briefing.
The incentives could be worth more than $20 billion in value to producers over the life of capacity agreements signed, assuming the entire 4.5 billion cubic feet per day of capacity is subscribed, according to estimates by Black & Veatch, a consulting firm working with the state.
TransCanada is proposing a 1,500-mile, 48-inch pipeline from the North Slope to its Aeco hub in Alberta that could cost as much as $41 billion, the pipeline company estimates.
The state endorsed TransCanada over the rival Denali pipeline group led by BP and ConocoPhillips after the Calgary-based pipeline company agreed to meet certain state goals regarding tariff structure and expansion terms.
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