Representatives of Alaska Pipeline Project said Tuesday that Haines and Skagway might both be used as transshipment ports for pipe if the company wins the job and natural gas is piped through Canada along the Alaska Highway.
Alaska Pipeline Company and Denali, a competing company, are in a horse race to secure bids from North Slope natural gas producers to ship gas to Lower 48 markets. Decisions on which outfit will get the work are likely to be more clear at the end of the year, when producers must express interest at the end of a federally-mandated “open season.”
But it’s also possible producers will balk at both proposals, or bid on elements of one or both, or attach conditions to their bids, officials visiting Haines said this week.
Richard Fafara, a construction and cost-estimating planner for Alaska Pipeline Project, said if the pipeline comes down the highway, the firm may find it most economical to ship pipe from Haines to locations northwest of town, and supply easterly sections of the line from Skagway.
A decision on port use wouldn’t happen until next spring at the earliest, company officials said. Pipeline construction would begin in 2015, with use starting in 2020, they said. Project officials said they’re in the early stage of investigating port options and suggested there are issues with both Lynn Canal towns.
“You don’t have much of a port facility and Skagway’s pretty crowded,” Fafara told a crowd of about 20 residents who turned out Tuesday to hear a presentation on the company’s plans. He said pipe might be shipped from Haines for two or three years, but details haven’t been worked out.
In contrast to Denali’s plans to ship 80-foot sections of pipe through town, possibly requiring extra work to the Haines Highway, Alaska Pipeline would likely ship 40- or 60-foot sections, Fafara said. “Everyone’s confident nothing new would have to be done to the Haines Highway,” he said, adding that his company has had an ongoing dialogue with state highway officials.
Fafara was noncommittal about whether the company or the community would bear the costs of potential needed improvements to the Haines port. “It will take an awful lot more work to see what’s available and what’s required” and to come to some kind of arrangement, he said.
Fafara works for TransCanada, a Canadian pipeline construction firm that controls much of that country’s natural gas pipelines. Bryan Trimm, a community affairs manager for ExxonMobil, chaired Tuesday’s meeting. Alaska Pipeline Company is a partnership between the two firms.
Trimm said a go-ahead on the project will come down to a decision by the owners of the North Slope’s natural gas reserves about the price of natural gas and what that price might be in 20 years.
But the open season may not necessarily end with a decision by the producers to commit to one of the two options. In past instances, competition between two companies for a pipeline project has extended into the permitting process, Trimm said.
North Slope natural gas producers include BP, Chevron, ExxonMobil and Conoco Phillips. The Denali project is a partnership between BP and Conoco Phillips. Although natural gas producers and the two pipeline companies have common ownership, a regulatory “firewall” prohibits exchange of information between related firms, Trimm said.
By the terms of an agreement with the State of Alaska, Alaska Pipeline Company’s proposal includes two options for shipping gas to markets from Prudhoe Bay: By a 1,700-mile line to northwest Alberta or by an 803-mile pipeline to Valdez. Trimm said the company will know by this fall which of the two options it will pursue.
Under either scenario, the company has committed to five “off-take points” in Alaska, spurs where gas from the line will be made available to communities. Customer demand and discussions with the state will determine the location of those, officials said. “You have to have a certain amount of customers to make an off-take point economical,” Fafara said. Such spurs are often associated with power-generation plants, he said.
Under the Alberta alignment, the 48-inch, buried pipeline would deliver 4.5 billion cubic feet of gas a day to Lower 48 markets, connecting with a network of other pipelines at Boundary Lake, between British Columbia and Alberta. It would have a lifetime of at least 30 years, Trimm said. There are an estimated 35 trillion cubic feet of known reserves of natural gas on the slope, but as much as 200 trillion cubic feet of unproven reserves, he said.
Besides Haines and Skagway, other Alaska port cities that may be involved in the project include Anchorage, Whittier, Seward and Valdez.
Alaska Pipeline Project is supported by the State of Alaska through the Alaska Gasline Inducement Act, legislation passed during the administration of former Gov. Sarah Palin. Under AGIA, the company must continue to pursue an application for the project with the Federal Energy Regulatory Commission, including submitting an Environmental Impact Statement, through 2012, regardless of the results of the open season.
Information distributed at Tuesday’s meeting included Internet links to job-training opportunities, forms for contractors wishing to be added to bid lists and comment forms. The project’s mailing address is The Alaska Pipeline Project Office, 3201 C Street, Suite 505, Anchorage, AK 99503.
More information on the project is available at http://www.thealaskapipelineproject.com Comments may be e-mailed to [email protected].