Surprises abounded in the six proposals to build Alaska’s massive gas pipeline. One bidder was from China; another was a North Slope producer with an estimate far higher than any yet for the line’s cost. The state is hoping for a mid-2008 start on the project, but not all are ready to meet the state’s terms.

Five entities submitted bids Nov. 30 for a pipeline from Alaska’s North Slope under AGIA, the Alaska Gasline Inducement Act. At least 36 trillion cu ft of proved reserves from Alaska could be shipped in a little over a decade, according to official estimates.

Sinopec ZPEB, a venture between Chinese energy company Sinopec and Chinese oil-services organization ZPEB, may be the most surprising applicant. Other bidders are TransCanada Corp., Calgary, Alberta; AEnergia LLC, Sacramento, Calif.; and the Alaska Gasline Port Authority. The Alaska Natural Gas Development Authority proposed to build a spur line to the Anchorage region off a main line from the North Slope.

“America needs Alaska’s gas to provide an affordable, steady, reliable stream of clean energy to residential, commercial and industrial consumers,” said Alaska Gov. Sarah Palin (R), announcing the applicants. “Today’s progress toward building an Alaska gas pipeline demonstrates to the world that we are well on our way toward achieving that vital objective,” she said.

ConocoPhillips Co., Houston, a North Slope producer, also bid to deliver gas from the North Slope to Midwest markets, but it does not meet AGIA minimum requirements. Its estimate for a pipeline to Alberta is up to $42 billion, up from $30 billion a few years ago.

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BP PLC, London, and ExxonMobil Corp., Irving, Texas, also North Slope operators, declined to participate after Alaska rejected a 2006 deal crafted by Gov. Frank Murkowski (R), Palin’s predecessor. MidAmerican Energy Holdings Co., Des Moines, Iowa, had publicly expressed interest, but sent Palin a letter last week saying it chose not to submit a bid due to the state’s ongoing corruption probe. BG Group PLC of London also chose not to become involved.

The proposals submitted under AGIA have not been made public, but some details are available.

The Alaska Gasline Port Authority is a consortium of the City of Valdez, Fairbanks North Star Borough and the North Slope Borough. The authority sees a North Slope gas commercialization concept that includes a pipeline from Prudhoe Bay to Valdez, liquefaction and liquids extraction facilities in Valdez and a gas conditioning plant in Prudhoe Bay. The authority wants to design its pipeline to allow another entity to construct and operate a spur line into Canada to move Alaska gas to the Midwest.

Bill Walker, a member of an Anchorage law firm, is the consortium’s project manager. He could not offer details on how the project would be financed, but says Alaskans would favor Port Authority proposal over others. “It creates the greatest advantage for Alaskans to use their own natural gas,” he says.

Alaska has been trying to build a natural gas pipeline for several decades. State Senator Kim Elton (D) says he is as optimistic as he has ever been that it will be built. Former Gov. Murkowski generated interest among the North Slope producers for building the pipeline, but not among Alaskans or legislators. “It was an attempt by the administration and the oil companies to shift risk and costs to the state of Alaska, and it was a non-starter,” Elton says.

Elton has not reviewed the proposals submitted under AGIA, but believes it is unlikely Sinopec ZPEB will be selected, particularly if it plans to ship Alaska gas to East Asia. “In Alaska and in the U.S. they have talked for decades about the need to bring energy to the lower 48. It would be a real switch to go to a plan that serves Asian markets,” he says.

Under current schedules, preconstruction work on the gas line could begin in the second half of 2008. State officials and consultants are now evaluating the applications. A public comment period follows their review. After a winner is named, the state legislature has to endorse the award of the license.