The Alaska Natural Gas Pipeline

In 2008, TransCanada was awarded a contract by the Alaska state legislature under the Alaska Gasline Inducement Act (AGIA).

With a contract signed, sealed, and delivered, TransCanada, later in partnership with ExxonMobil, begun project development. Their first phase includes engineering, environmental reviews, aboriginal relations and commercial work to conclude an initial binding open season. Over the next couple of years it will be important for TransCanada and ExxonMobil to work out deals with potential natural gas shippers to ensure the project’s economic viability.

If enough satisfactory contracts are secured during the open season period, TransCanada would begin construction after regulatory approvals. TransCanada hoped to have the pipeline in service by the year 2018.

TERMINOLOGY LESSON – An Open Season is the process by which potential users of a facility – such as the gas pipeline – submit bids indicating the terms under which they agree to take service.

The Pipeline According to TransCanada

TransCanada applied under the Alaska Gasline Inducement Act (AGIA) to build a 4.5 billion cubic feet per day (bcf/d), 48-inch diameter natural gas pipeline running approximately 1,715 miles (2,760 km) from a new natural gas treatment plant at Prudhoe Bay on Alaska’s North Slope to Alberta, Canada. The company plans to integrate¬† the pipeline with TransCanada’s Alberta System, providing access to consumers throughout the Lower 48. The application includes provision for expansions up to 5.9 bcf/d through the addition of compressor stations in Alaska and Canada.

Issues related to the route of the pipeline are still being worked out, however, TransCanada intends for the new pipeline to parallel the route of the existing Trans-Alaska Oil pipeline to a location near Fairbanks, Alaska. From there it would follow the Alaska Highway, onwards through northern British Columbia to link with the Alberta, Canada Hub on TransCanada’s pipeline grid in northwestern Alberta.

Per the proposal, TransCanada estimates the Alaska pipeline section will be 750 miles (1,200 km) long, with six compressor stations at start-up and five or more natural gas delivery points in Alaska. The Canadian section of the pipeline to Alberta would be approximately 965 miles (1,550 km) long, with ten compressor stations at start-up and eight intermediate delivery points in the Yukon.

A variety of maps and more detailed information about the Alaska Natural Gas Pipeline project are online: http://www.thealaskapipelineproject.com/.

The Backstory of the Pipeline

Years before TransCanada was awarded the contract (Aug. 2008)…

In 2001, three North Slope producers began to study in detail the possibility of a gas pipeline system from Prudhoe Bay to Alberta, Canada and then down to Chicago. The Alaska Gas Pipeline Producers Team’s cost estimate came to approximately $22 billion (in 2014 money). The construction was estimated to require five to six million tons of steel, taking a toll on the entire world’s steel output for several years. The challenges, cost, and risks were numerous, and natural gas prices (as is natural gas itself) are volatile.

Early on planners envisioned two segments – the first a 2,100 mile segment roughly along the lines of the initial TAPS from Prudhoe Bay through Alaska, and following the Alaska highway to Alberta Canada. The second a 1,500 mile segment of entirely newly-built pipeline from Alberta to Chicago (some estimates say utilizing existing pipelines with possible expansions is a feasible alternative). TransCanada’s vision is similar today.

Dubbed, “An Alaska-sized Project,” the Alaska Gas Pipeline will potentially be the biggest construction project in U.S. history.

In total, the pipeline system could consist of up to 3,600 miles of large diameter, high-pressure buried pipeline supplying clean energy. The state of Alaska initially negotiated with a number of companies including BP Exploration (Alaska), Inc. (BP), ConocoPhillips Alaska, Inc. (CP), and ExxonMobil Alaska Production, Inc. (EM).

Permitting, planning, engineering and eventual construction would begin once a contract was awarded. Of course, a contract with TransCanada was awarded in August 2008 and they’re now beginning with initial work already (10/19/12).

It took a long time for the ANGP project to officially start but it’s rolling now with TransCanada at the helm. Consider this: Alaska had to obtain more than 1,300 federal and state permits for constructing and operating TAPS.

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About the Natural Gas Pipeline

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