BP, Conoco Ditch $35B Alaska Pipeline Project

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BP and ConocoPhillips scuttled plans for a $35 billion Alaska natural-gas pipeline due to tepid customer interest. The pipeline was once proposed to be the largest private construction project in U.S. history, according to Bloomberg News. The companies will withdraw an application for the project that would have brought natural gas from Alaska's North Slope to Canada and the continental U.S.

BP (BP), Europe's second-largest oil company, and Conoco (COP), the third-largest U.S. oil company, have spent $165 million on the Denali project. The project would not have been operational until 2020. While BP and Conoco had been in talks with shippers for over a year, they were unable to secure the necessary commitments to move forward with Denali.

Exxon Mobil (XOM), the largest U.S. oil company, TransCanada (TRP) are also working on a pipeline proposal similar to Denali. Exxon and TransCanada said in January 2010 that their pipeline would cost $32 billion to $41 billion, Bloomberg reported.

The companies are looking to start construction on that project next year, but the price of natural gas weighs on the chances of an Alaskan pipeline being profitable, especially when producers are flooding the market with excess supply from shale formations in the lower 48 states.