By Sam Fletcher
OGJ Online
HOUSTON, Feb. 9�A trio of major Alaskan North Slope producers, the North American Natural Gas Pipeline Group, is taking preliminary steps to build a huge pipeline system through Alaska and Canada to US markets, industry officials told Alaskan legislators this week.
The group�s 3-member management committee�Joe Marushak of Phillips Alaska Inc.; Ken Konrad, BP Exploration (Alaska) Inc.; and Robbie Shilhab, ExxonMobil Corp.�outlined preliminary plans and procedures for the proposed pipeline in separate Senate and House committee sessions of the Alaska legislature.
That�s part of the three partner companies� strategy to keep US and Canadian authorities abreast of plans for the proposed project.
Marushak told the legislators, �We need to establish Alaskan gas as a competitive source of supply� against competing gas suppliers in the US and Canada.
�A competitive project means that no cost overruns can be tolerated, especially in a project of this magnitude,� he said.
Delays in obtaining government authorizations for the project could add to its total cost. The initial work program is expected to cost at least $75 million, officials said.
The group�s management doesn�t yet have a full feasibility cost estimate for all of the technical, permitting, and logistics costs for either of the two proposed pipeline routes.
The proposed northern route would loop offshore from Alaska�s North Slope to Canada�s Mackenzie Delta and down the Mackenzie Valley to northern Alberta. The proposed southern route would parallel the existing oil pipeline from the North Slope to Fairbanks, then follow the Alaska Highway into northern Alberta.
In Canada, the group will look at either tying the Alaska gas pipeline into the existing pipeline structure, with possibly some expansion of that system, or building one or more new pipelines to carry the gas into US markets.
The two pipeline segments from Alaska to Canada and from Canada to US markets would �represent a pipeline system 4-5 times the length of the Trans Alaska Pipeline System. This is an enormous undertaking,� said Marushak.
The proposed pipeline would be about 48 in. diameter, made of 1-in. high-strength steel, and will operate at a pressure of 2,500 psi or more.
Because of advancements in pipeline technology, however, the pipeline will be a more cost-effective system with a smaller �footprint� than TAPS. Its more efficient design will require fewer compressor stations, with less fuel consumed and lower emissions, officials said. But the installed horsepower necessary to move the gas from Alaska to end markets will be many times the total on TAPS.
The group is in the process of finalizing its near-term work schedule and is initiating specific plans for early field surveys,� some of which are seasonal in nature and thus very time sensitive,� industry officials said.
In late January, the group had �a pre-bid conference� to brief potential contractors on the initial work and criteria for awarding contracts. Team members are already interviewing contractors to assess their qualifications.
Over the next year, participants will do conceptual designs of the world�s biggest carbon dioxide treatment plant, another plant for the recovery of natural gas liquids, high-efficiency compressor stations, and the pipeline itself.
Group officials have an �aggressive target� to file appropriate applications with the US Federal Energy Regulatory Commission and its counterpart National Energy Board in Canada late this year.
The industry group does not yet have definite milestones for completion of many of the components of the project. But they are �working to better define a time line over the next few weeks.�
The total potential gas resource of Alaska�s North Slope has been estimated at 100 tcf, officials said. Alaska could supply 3-4 bcfd of gas to the Lower 48 States with a pipeline in place.
The gas pipeline group now employs 50 people but expects to increase its staff to 90 by April.