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1409_Sustainer-Tiffany

Parnell Says Gas Pipeline Has Reached New Milestone

By | February 16, 2013 - 1:48 pm

Governor Sean Parnell gave an update in Fairbanks Friday on what he called a significant milestone in plans for building a gas pipeline in Alaska. In his state of the state address a few weeks ago, the governor had given the companies, BP, ConocoPhillips, Exxon and Transcanada a deadline of February 15th to come forward with details of their proposed project.  A letter from the companies, delivered on Friday, stated they had made a project concept selection. The governor called that an important phase in building a line.

“They said they would move forward on the concept of a 42-inch line, five off takes for Alaskans, gas treatment plant on the North Slope and
the project details are actually in their attachment to that letter,” Parnell said. “The  significance of it is, it’s the first time in Alaska’s history that
companies that can build and operate a pipeline are together on a project concept selection like this.”

Parnell said the line would run 800 miles, mostly underground. Although the treatment plant is proposed for the North Slope, there is not yet a
decision about where on the coast the line would end. The cost is estimated to be between $45 and $65 billion dollars. The governor said he wants more investment from the companies before a discussion about additional
investment or tax guarantees from the state.

“The state has already committed up to $500 million to this gasline project. When I see the companies step forward with hundreds of millions of dollars, which will be the next phase, the pre-feed phase, that would be the appropriate time to talk about next steps when it comes
to fiscals.”

Larry Persily is the federal coordinator for permitting for the gasline project. He said there is good news in Friday’s announcement but for Alaskans, expectations over the past 10 years have outpaced reality. Persily said the project is not moving as fast as Alaskans had hoped or been led to believe by past politicians who had promised that it would be easy and fast.

“When you’re trying to put together the largest and most  expensive natural gas project in the world, there’s a tremendous amount of risk in construction cost over runs, market appetite for it, so it is a exceedingly laborious, painful, slow process that we’re going through,” Persily said.

The letter the governor received from the companies doesn’t line out a site for the liquefaction plant. Last October the companies said they were considering 22 possible locations in Prince William Sound, Cook Inlet and elsewhere in Southcentral.

Friday’s letter said the plant would require more land than previously proposed at up to 600 acres rather than 500 acres. The liquefaction plant’s capacity will be 15 to 18 million metric tons per year averaging about 2 to 2.4 billion cubic feet of gas per day. The update did not have any new information about engineering, design or environmental studies.

Letter to Parnell

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