TransCanada's Take
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Tuesday morning in the Anchorage Daily News, reporter Wesley Loy reported that some are raising concerns about the amount of profit that TransCanada will make off the Alaska gas pipeline as well as the control of gas in the future.
I first broached this issues last month in a February 26, 2008 blog where I wrote "there are concerns about the rate of return TransCanda is claiming for the Canadian portion. TransCanada has projected a 14% rate of return, when current class one pipeline systems in Canada are paying out 9 to 11% rates of return."
Steve Porter, a consultant on the gas line for the legislature, stated that the 14 percent proposed by TransCanada could easily grow to 25 percent under certain economic conditions.
A high profit and total control of Alaska's gas in Canada by TransCanada could translate into higher shipping costs for producers and less tax and royalty revenue to the state.
The control of the gas is another issue that is raising some concerns. Under the terms of their AGIA application, all gas must flow through TransCanada's hub.
According to Loy's article, Alliance Pipeline Ltd., owned partly by TransCanada rival Enbridge Inc., objects to TransCanada's proposed exclusive hold on Alaska's gas.
Alliance has stated that they can compete as the cheapest way to move Alaska gas from Alberta to the prime Midwest market at Chicago.
"TransCanada implies that it has a monopoly over the flow of Alaska natural gas," Alliance wrote, but added the gas "should not be held captive to TransCanada's pipeline network", according to the ADN story.
Also, we've still heard very little from the State on TransCanada's withdrawn partner's liability and the degree to which TransCanada is depending on financial backing from Congress.
For the last few months the comments about TransCanada have all been the same. A smart, well run company that wouldn't have bid on AGIA unless they built in some trap doors so they could step out.
Meanwhile, nobody is talking to the people who can actually make the project happen.
To read the article on TransCanada:
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