State officials released a report Nov. 3 detailing progress on development of a natural gas pipeline.

The report was intended to assure Alaskans that the big project remains on track and that new shale gas development and low gas prices in the Lower 48 have not eroded the North American market for Alaska gas.

The Alaska Pipeline Project Report was submitted to the Legislature Oct. 31 by Mark Myers, the state's pipeline coordinator under the Alaska Gasline Inducement Act.

The report said that TransCanada Corp., which has received a state license under AGIA, remains on target to complete an initial open season by the end of July 2010, with a significant boost in pre-open season investment.

Under the AGIA license, the state pays for 50 percent of TransCanada's costs up to the open season.

Efforts to advance Alaska's natural gas pipeline received a significant boost over the summer with the announcement that TransCanada and ExxonMobil reached an agreement to jointly progress the Alaska pipeline project, Myers said in the report.

"This is exactly the type of commercial alignment which AGIA was developed to encourage," Myers said in a Nov. 3 briefing. "ExxonMobil brings upstream development expertise, the wherewithal to design a gas treatment facility and invaluable technical data of the gasline route as an owner of TAPS."

ExxonMobil is also an owner of substantial North Slope gas reserves. TransCanada, as a pipeline company, does not own gas.

Meanwhile, a rival gas pipeline project, Denali, is also working toward a 2010 open season.

"Denali has a team of 95 at work on the project, including 85 Alaskans," said Denali spokesman Dave MacDowell. Denali is a joint venture of BP and ConocoPhillips, both owners of North Slope gas reserves.

In addition to the synergies that these two entities bring to the project, ExxonMobil's participation has started to pay out though its financial investment into the project.

"In my perception, ExxonMobil commits itself financially to the front end of any activity it pursues to maximize success," said Department of Natural Resources Commissioner Tom Irwin. "We are seeing a joint effort by these companies that will result in increased pre-open season spending from $83 (million) to $150 million. This is a encouraging."

However, ExxonMobil is not yet fully a part of the TransCanada initiative. The company wants changes in the AGIA law before it fully signs on to the effort, ExxonMobil officials have said.

Myers said TransCanada has continued to make progress heading into the upcoming 2010 open season with substantial progress on several fronts, including:

Expanding the project management team to include 100 full-time employees (50 percent from TransCanada and 50 percent from ExxonMobil)

Establishing and staffing a new project office in Anchorage

Acquiring video along the majority of the route for both the mainline and liquid natural gas alternatives

Preparing to complete an instate demand study

Working with 24 Alaska-based service providers as part of the project participants' commitment to the Alaska business and local hiring provisions of AGIA

The Denali project has contracted with 46 Alaska firms to provide goods and services.

"Alaskans should be encouraged by the progress which TransCanada and ExxonMobil have demonstrated in moving the APP forward," Myers said.

A large-capacity natural gas pipeline is the single most important project to the economic future of Alaska, said state Revenue Commissioner Pat Galvin.

"It is critical to Alaska that we keep this project moving forward," he said. "The advancement of Alaska's gas pipeline cannot be dictated by short-term market fluctuations. We must continue to shorten the time to get to the actual project go-ahead decision, or `project sanction.' The open season is an important step, but continuing to the project sanctioning decision is the key."

MacDowell said the Denali group defines a successful open season, "as one where shippers make the multibillion dollar financial commitments to the project so that we can move toward certification by the Federal Energy Regulatory Commission, financing and construction."