Outgoing TransCanada CEO touts economic benefits of Alaska pipeline to Canada
By: Lauren Krugel, The Canadian Press
30/04/2010
CALGARY - Economic benefits from TransCanada Corp.'s planned Alaska natural gas pipeline are Canada's to lose, the outgoing chief executive of North America's largest gas shipper said Friday.
"The $20 billion or more that will be spent on constructing that pipeline on the Canadian side will be a very big economic shot in the arm for our country and for the Yukon in particular," Hal Kvisle told reporters after presiding over his last annual general meeting at the helm of TransCanada (TSX:TRP).
The gargantuan project, in which U.S. energy giant ExxonMobil Corp. (NYSE:XOM) is a partner, would tap into natural gas fields on Alaska's North Slope for the first time. It could cost as much as US$41 billion, depending on the route.
Potential customers have two options before them. One would connect the gas to TransCanada's (TSX:TRP) existing system in northern Alberta, traversing the southern Yukon and northeastern British Columbia en route.
Another would be to ship the gas to the Alaskan port of Valdez, where it would be condensed into a liquid state and sent by sea on specialized tankers.
A process kicked off Thursday inviting companies to commit their natural gas to the pipeline. The outcome will largely determine which route TransCanada and ExxonMobil will pick.
But another factor could be the pace of the regulatory process, Kvisle said.
"If the Canadian regulatory process was to falter and not proceed expeditiously, that could well be a factor that would cause the gas to go to Valdez and be shipped out of Alaska in (liquefied natural gas)form," he said.
"We don't expect that will be the case but it is the fall-back opportunity for the American producers in the event that we all see a difficult regulatory process in Canada."
TransCanada and other companies backing a smaller Arctic natural gas pipeline — the Mackenzie Gas Project in the Northwest Territories — have been wading through a protracted regulatory process for several years, which appears to be finally nearing its end point.
The 1,220-kilometre Mackenzie line would connect gas fields near the coast of the Beaufort Sea in the Northwest Territories to the Alberta boundary.
The National Energy Board is expected to make its final decision in September. Lead Mackenzie partner Imperial Oil Ltd. (TSX:IMO) said the long-delayed $16.2-billion project won't start up until at least 2018.
Kvisle is set to retire at the end of June after nine years at the helm of TransCanada, which has a growing power generation business in addition to its vast network of pipelines stretching across the continent.
Russ Girling, TransCanada's chief operating officer who played a key role in many of the company's growth initiatives, will be the new boss.
"The question that I've been most asked over the last couple of weeks since the announcement was made was 'does this change in CEO signal a change in strategy?'" Girling told shareholders.
"And my short answer to that question is absolutely not. Going forward our strategy will not change."
TransCanada's Keystone oil pipeline is set to begin delivering crude shipments from Alberta to U.S. Midwest refineries later this year. The National Energy Board recently approved an expansion to bring oilsands crude to the lucrative U.S. Gulf Coast, where much of the continent's refining capacity is concentrated.
Earlier Friday, the Calgary-based company said it earned $303 million, or 43 cents per share for the quarter ended March , down from $334 million, or 54 cents per share, in the first quarter of 2009. Net income per share was 43 cents, down from 54 cents.
A more closely monitored measure of profitability, comparable earnings, was 48 cents per share or $328 million — missing analyst estimates by two cents per share.
TransCanada's revenues fell to $1.95 billion from nearly $2.2 billion.
http://www.winnipegfreepress.com/business/breakingnews/transcanada-q1-pr...
