FERC OKs review for BP-Conoco Alaska natgas pipeline

By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - The Federal Energy Regulatory Commission on Wednesday granted a request from BP and ConocoPhillips for an early review of a plan for a $30 billion (15.2 billion pounds) natural gas pipeline from Alaska's North Slope through Canada to the lower 48 U.S. states.

The pipeline would open in 2018 and the two companies would file for final FERC approval in 2011 through their jointly owned unit, Denali - The Alaska Gas Pipeline.

The early review was advised by FERC for such a complex project.

BP and Conoco are two of the three major North Slope oil and gas producers, along with Exxon Mobil.

The BP-Conoco proposal calls for a 48-inch or 52-inch diameter pipeline to run from Prudhoe Bay through western Canada and deliver 4 billion cubic feet a day to U.S. markets.

"Pre-filing" allows Denali to work with FERC in drafting environmental, economic and engineering studies before a final application is submitted.

The project is similar to one rejected by Alaska Gov. Sarah Palin in January when Conoco insisted that North Slope producers start talks for a tax deal before preliminary work is begun. The new Denali plan drops the demand to talk taxes before planning starts, but BP and Conoco still want a tax deal in place before an open season for pipeline customers opens in 2010.

Meanwhile, the Alaska legislature is considering approval of a state license for a competing North Slope gas pipeline project endorsed by Gov. Sarah Palin.