Natural gas pipelines update: two projects in the mix, will either fly?

• Author: White, Rindi
• Position: OIL & GAS

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Two natural gas pipelines have backing from the state and oil industry leaders to carry gas produced as a byproduct of drilling to consumers, either in Southcentral and Interior Alaska or to tidewater for shipping to market.

One is a joint project between TransCananda, BP, ExxonMobil, and ConocoPhillips to ship liquefied natural gas (LNG)via a pipeline to somewhere in Southcentral Alaska for shipment to Outside markets.

So far about $35 million has been spent to investigate that concept, a small piece of the estimated $45 billion to $65 billion project--a project some say would be the most costly undertaking in North America.

The second is the Alaska Standalone Pipeline Project, or ASAP, a more modest project aimed at developing an instate natural gas pipeline designed to carry natural gas from the North Slope to Southcentral, with off-points to serve communities along the way.

The project has backing from the Alaska Legislature, which agreed to spend $400 million to do more preliminary work to further it along. Another $72 million had previously been appropriated to the Alaska Gasline Development Corporation, the state corporation tasked with developing the pipeline.

A Closer Look--South Central LNG Project

The South Central LNG project began as a plan to pipe natural gas to the Midwestern United States. TransCanada's application to the state to build the pipeline was accepted in January 2008 and later that year, then-Governor Sarah Palin signed a law awarding TransCanada $500 million in state backing for the project. TransCanada now holds the exclusive license to build and operate a natural gas pipeline in Alaska.

The project has since morphed into an eight hundred-mile pipeline from the North Slope to somewhere in Southcentral Alaska, where the gas would be cooled to liquefy it for shipping via tanker to world markets.

According to the federal Alaska Natural Gas Pipeline Projects office, the line as currently proposed would carry between 3 billion and 3.5 billion cubic feet of natural gas each day, some for use by Alaskans but most for export. The companies connected to the project announced in February they had selected a pipeline concept that includes an eight hundred-mile, forty-two-inch pipeline with up to eight compression stations, at least five take-off points for in-state gas use, a gas treatment plant on the North Slope, and a liquefaction plant in Southcentral. Estimates released in May indicate the peak...