Initial estimates for in-state demand of North Slope gas delivered through a proposed natural gas pipeline should be available within a week, according to the lead researcher on a U.S. Department of Energy project.
Charles Thomas, who is directing the study funded by the DOE, said a draft of the report is now being reviewed and will be released soon.
The information will be used in separate efforts now underway to plan spur pipelines that could deliver gas from a connection with an Alaska Highway gas pipeline to Southcentral Alaska.
Thomas is director of the Arctic Energy office of Science Application International Corp., with which DOE has contracted to do the demand study. SAIC did a widely publicized study of Cook Inlet gas potential two years ago, also directed by Thomas.
Information on how much gas will be needed in the future for residential, commercial and industrial use in Southcentral Alaska is necessary so the spur pipeline can be sized to deliver that amount of gas, Thomas said.
Meanwhile, separate feasibility studies are also underway on the spur pipelines, using both state and federal funds. The Alaska Natural Gas Development Authority, a state corporation, is investigating a spur pipeline from Palmer to Glennallen. Ultimately the Glennallen spur would connect with the large-diameter Alaska Highway pipeline in Delta, east of Fairbanks.
The authority has applied for a right-of-way corridor on state lands from Palmer to Glennallen and would use the existing trans-Alaska oil pipeline system corridor from Glennallen to Delta. Studies in support of the right-of-way application are nearly complete, according to Harold Heinze, ANGDA's director.
The state authority has committed all but $750,000 of its $2.17 million budget for this year, and is now circulating a request for proposals for a contractor to prepare a business plan for the pipeline, Heinze said. The contract is estimated to cost $600,000, and the plan would be applicable to either of two spur lines under consideration - the Glennallen route parallel to the Glenn and Richardson highways or the route to Anchorage from Fairbanks through Nenana along the Parks Highway, Heinze said.
Meanwhile, contractors working on the Parks Highway pipeline study are midway through their work, which is being financed by the U.S. Department of Energy. ASRC Energy Services and Michael Baker Consultants are working on the pipeline feasibility while Enstar Natural Gas is doing right-of-way work and an analyses of pipeline operations.
The contract with DOE was signed in September and results are expected by late summer 2006, according to Curtis Thayer, a spokesman for Enstar. The work is being supported by a $2 million DOE grant.
Heinze said none of the studies would result in enough information to make a decision on whether the Glennallen or Parks Highway routes is preferable.
If major gas discoveries are made in the Nenana Basin, where exploration is now underway, it could sway a decision on a pipeline route in favor of the Parks Highway route, he said, but the discoveries would have to be substantial.
If less gas is discovered than is hoped, a small-diameter pipeline to Fairbanks might still be feasible. If a spur pipeline from Delta through Glennallen to the Anchorage area is ultimately decided on, it would preserve the option of another spur pipeline someday to Valdez, Heinze said. Valdez is hoping a liquefied natural gas project might be built in the community.
Once a decision is made on which route is preferable, funds will have to be committed to preliminary engineering, Heinze said, which typically costs up to 5 percent of a total project budget. Thus, on a $400 million spur pipeline project, which is one figure mentioned as the possible cost of a spur line, the conceptual engineering could cost in the range of $20 million, he said.
The engineering could cost less, too, but experience has shown that projects with more up-front work done on conceptual engineering experience fewer cost-overruns or other problems, Heinze said.
Tim Bradner can be reached at tim.bradner@alaskajournal.com.
