Engineering the gas pipeline: an awesome challenge faces its engineers.

• Author: Liles, Patricia
• Position: ENGINEERING

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Alaska's massive natural gas pipeline project will enter a new stage this year--engineering and design--an area expected to present developers with extreme challenges, thanks to geological and structural conditions found along its proposed route in the far north.

Factors that must be included in the engineering design of an estimated 2,000-mile, high-pressure, large-diameter natural-gas pipeline running through Alaska and northern Canada include construction and operation through permafrost, crossing hundreds of streams and rivers, traversing several substantial mountain ranges and operating in regions with high potential for seismic activity.

BIG BUCKS

Both entities proposing development of the largest-ever private-sector construction project in North America plan to start work this year on preliminary engineering and design of the gas pipeline project to assemble estimated construction and operating costs for the new energy-transportation system.

Those estimated costs are needed for a pipeline operator to conduct an open season, which is the gathering of long-term gas shipping commitments from natural-gas producers, a step necessary to secure financing for the mammoth-sized project.

Both TransCanada, the Calgary-based pipeline company that in 2008 secured official State approval through the Alaska Gasline Inducement Act, and the Denali coalition, made up of North Slope producers BP Exploration (Alaska) and ConocoPhillips, plan to start their respective open seasons in 2010.

A key factor in securing those commercial shipping agreements is putting together dependable cost estimates for the multi-billion dollar construction project, currently believed to range anywhere from $26 billion up to $40 billion.

Denali--The Alaska Gas Pipeline LLC has said publicly that its recently formed company expects to spend $600 million before conducting an open season before the end of 2010.

Transeanada anticipates spending $84 million on the same process, concluding with an initial binding open season by July 2010, according to the company. Expenses that qualify for reimbursement under the State's cost-sharing commitment of $500 million for initial development costs is included in that spending estimate, according to Tony Palmer, TransCanada Alaska's vice president handling the Alaska gasline project.

"TransCanada believes very firmly that costs matters in our business," he said, in a mid-December telephone interview. "Some of those...