Does Japan's Nuclear Power Challenge Affect Northern Gas Pipeline Planning?
Conditions: the more there are, the fewer successful projects there can be and vice versa. Last week, Canada approved a Mackenzie gas pipeline project with many conditions attached. Investors will not commit to an Alaska gas project as long as Alaska's Legislature refuses to act on investment climate conditions. The US Feds are placing debilitating conditions on -- and roadblocks hindering -- Alaska OCS and on-shore oil and gas and mining initiatives. The new paradigm of shale gas competition provides challenging, gas marketing conditions in North America for Arctic gas.
We regret but expect a growing, worldwide bias against nuclear power production in wake of Japan's current travails. This would suggest improved demand conditions for LNG sales. However, LNG sales are dependent on creditworthiness conditions of large, stable customers like Japan's utilities, and, conditions supporting creditworthiness are changing. Alaska LNG sales are also dependent on supply conditions.
We suspect Alaska's LNG low-cost, tidewater competitors are hungrily evaluating new LNG sales opportunities this week. Some Alaskans may also be hoping for an LNG project. To be successful they would have a major, additional condition to accommodate that their low-cost, tidewater competitors do not face.
They would have to absorb the cost of an 800 mile gas pipeline from Prudhoe Bay to tidewater. On this Monday morning, we find ourselves pondering how 'conditions' affect mankind's future... ...as Dan Fagan plans for an event Wednesday to explore the 'Future of Alaska".
Dave Harbour, Publisher, Northern Gas Pipelines
Posted: March 16, 2011
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