Construction began on the 2,100-mile Persian Pipeline from the South Pars gas field through Turkey to Europe, Iranian media reports say.

Iran and Syria had signed a memorandum of understanding in April for the construction of the Persian Pipeline. Iranian, Syrian and Turkish officials last week signed a trilateral package of deals that included the development of upstream activities, drilling and exploration, as well as the construction of the Persian Pipeline.

Iranian Press TV reports Turkey has agreed to help Iran produce 720 billion cubic feet of gas each year for exports through Turkish territory.

The report says the development could be a signal that Iranian gas could go to Europe's heralded Nabucco pipeline.

The $10.7 billion Nabucco project is part of a European solution to move away from dependence on Russian energy resources.

Europe had gathered regional parties at a May 8 summit in Prague, Czech Republic, to gather support for the pipeline, though several potential suppliers, including Turkmenistan, did not sign on to a final declaration on Nabucco, raising concerns over supplies.

Kirkuk-Banias tender open
Iraq is looking for foreign offers to repair its Kirkuk-Banias oil pipeline following a lack of development from a Russian company, the Iraqi Oil Ministry said.

Russian engineering company Stroytransgaz signed a deal to rehabilitate the oil export route in March 2008 but has not moved yet on the project, Russian oil and gas site Neftegaz.ru reports.

"The Russian company failed to do the job and now we are seeking other foreign firms to evaluate the damage and rebuild the pipeline," said Asim Jihad, the spokesman for the Iraqi Oil Ministry.

The Kirkuk-Banias oil pipeline extends 500 miles from oil fields in northern Iraq to the Syrian port of Banias. At its peak, the line carried around 300,000 barrels per day.

Repairs to the line would give Iraq a vital avenue for oil exports to Europe while providing much-needed economic incentives to Syria.

North Slope oil production hurts pipeline
Technological improvements are needed to move lower volumes of oil through an Alaskan pipeline system as North Slope production declines, operators say.

Alyeska Pipeline Service Co. is looking at a $400 million upgrade to its 800-mile Trans-Alaska pipeline to handle lower volumes, the Platts news service reports.

The pipeline from Prudhoe Bay to Valdez, Alaska, had an initial design capacity of 2 million barrels per day in the 1970s, though production from North Slope fields dropped off in the late 1980s.

Weather and maintenance delays already suppress volume to around 600,000 bpd, with average volumes leveling off at around 700,000 bpd. By 2015, however, production is expected to drop below 500,000 bpd as production declines at a rate of around 5.5 percent per year, said Kevin Hostler, Alyeska's president.

With this precipitous rate of decline, Hostler said modifications to the Trans-Alaskan system are needed to handle production at 200,000 bpd, though developments are highly dependent on the economy.

"We don't really know what the lower threshold is because it will also depend on oil prices and costs," he said.

Shale gas a blow to TransCanada?
Technological developments in the extraction of gas in shale deposits in the Lower 48 could lower the priority for an Alaskan gas pipeline through Canada.

Alaska Gov. Sarah Palin awarded TransCanada the rights to build a natural gas pipeline from the North Slope through Canada to supply markets in the Lower 48.

A pipeline from the North Slope would bring 4 billion cubic feet of natural gas per day to markets in the Lower 48, Alaska and Canada.

Alaska had given TransCanada the project, but Palin's refusal of a portion of a federal stimulus package has raised some concerns over the deal.

Meanwhile, technological developments in the extraction of natural gas from shale deposits in Louisiana and Texas and elsewhere have put moving ahead on the project in doubt, the Fairbanks Daily News-Miner reports.

Instead, Palin should move ahead with an Alaskan project that looks to Asian and other foreign markets to distribute some 2 billion cubic feet per day in order to keep line pressure up to develop oil deposits, the report says.

State Sens. Fred Dyson and Tom Wagoner, both Republicans, responded to the increasing push toward shale deposits, however, saying shale gas fills a "temporary market void" while developments on the North Slope project move ahead.