ConocoPhillips, BP propose Alaska pipeline

The concept of a multibillion-dollar pipeline to bring huge natural gas reserves to U.S. markets from Alaska's North Slope has been knocked around for more than 30 years. ConocoPhillips and BP said Tuesday that they have linked arms to make it happen.

"The time has come now with the value of gas increasing and the need in the United States for that valuable commodity to bring that gas to market," said Jim Bowles, president of ConocoPhillips' Alaska division.

The companies would build a pipeline from Alaska to Alberta and possibly into the Lower 48 states.

What's more, they bypassed an Alaska bidding process, eschewing state incentives and putting forth their own plan to lock in customers, gain approvals from U.S. and Canadian governments and build the pipeline.

"We're not asking for anything," Bowles said in Anchorage. "This project is moving forward on its own."

Gov. Sarah Palin, who championed last year's bidding under the Alaska Gasline Inducement Act, wasn't insulted. If it means a viable project will get moving, all the better, she said shortly after the companies unveiled their plan.

"Choices allow for competition between projects," said Palin, who discussed the venture with the companies before they announced it. "If it can result in finally more exploration and more development that is safe and sound, at the end of the day, that is all good."

The pipeline, with a cost estimated at $25 billion to $42 billion, would be the largest-ever private sector construction project in North America, ConocoPhillips said.

The Houston-based oil giant and London-based BP aim to spend $600 million to solicit customers to make long-term commitments to use the pipeline. That process, called an "open season," would occur in late 2010 and early 2011.

After that, they would seek approvals from the Federal Energy Regulatory Commission and its counterpart in Canada, the National Energy Board, before starting construction.

Meanwhile, they will open a headquarters in Anchorage that will employ 150 by the end of the year. Eventually, the project will have 500 workers plus "several thousand contractors," said Doug Suttles, president of BP's Alaska division.

"We are starting now. We're off," Suttles said.

The only proposal of five in the Alaska bidding process that was chosen for further review by Palin's administration was from Calgary-based pipeline giant TransCanada.

That plan is for a 48-inch pipeline to run 1,700 miles from Prudhoe Bay to Alberta, where it would tie into existing pipelines to reach U.S. markets. TransCanada estimated a cost of $26 billion to $35 billion.

The ConocoPhillips/BP plan calls for a similar route.

Tony Palmer, a TransCanada vice president, said Tuesday he supports "alignment" with ConocoPhillips, Exxon Mobil, BP, the state of Alaska and his company.

A project to bring the North Slope's natural gas to market in the U.S. has been discussed since crude oil started flowing from the $8 billion Trans-Alaska Pipeline in Prudhoe Bay in 1977. The Energy Department says the North Slope has proven gas reserves of 35 trillion cubic feet, but geologists say as much as 200 trillion cubic feet remains undiscovered.