Neither of two routes proposed for construction of a pipeline to deliver natural gas from Alaska's North Slope to the contiguous 48 states would be economically feasible without government incentives. That's the conclusion of a recently completed $125-million study sponsored by the major North Slope oil and gas producers.
The Alaska Gas Producers Team, comprising BP, ExxonMobil Corp. and Phillips Petroleum Co., launched the study in December 2000 with a budget of $75 million and a working estimate of about $10 billion for a line that could transport as much as 4 billion cu ft per day (ENR 12/18/00 p. 32). One proposed route for the line, known as the ÒnorthernÓ route, would run from Prudhoe Bay, Alaska, offshore under the Beaufort Sea to Mackenzie Delta and continue south up the Mackenzie Valley, covering 1,800 miles. The ÒsouthernÓ route would parallel the Trans Alaska Pipeline south to Fairbanks, Alaska, then follow the Alaska-Canada Highway, a total distance of about 2,140 miles.
But the study group found that construction of the southern pipeline would cost $19.4 billion and the northern pipeline's cost would be $18.6 billion. In an effort to improve the project's economics, the pipeline size was boosted from 48-in.-dia to 52-in.-dia, yielding a capacity of 4.5 bcfd, says a team spokesman. The team members now are concentrating on informing U.S. and Canadian government officials about the findings. Initiatives have been launched in both countries to encourage the project through both legislative and regulatory incentives.