By Tim Bradner
Alaska Journal of Commerce

A state-led effort in planning a "bullet line" to bring natural gas from the North Slope is moving forward as a contingency, in case a proposed large gas pipeline falters.

Preliminary permit applications will be filed in October for a $4 billion, 24-inch bullet pipeline from the Slope to Southcentral Alaska, according to Harry Noah, the state's senior manager of the project.

Proposals will also be solicited for a contractor to do an environmental impact statement for the project, Noah said.

The bullet line would be a 24-inch gas pipeline that could deliver up to 1 billion cubic feet of gas to the Southcentral region as well as Fairbanks, although Noah's group is assessing pipelines that would deliver smaller volumes of gas.

State agencies are leading the bullet line effort. Noah works in the Department of Natural Resources and is coordinating the project. Applications for state and federal rights-of-way and a U.S. Army Corps of Engineers Section 404 permit will be filed by the state Department of Transportation and Public Facilities, he said.

However, a private firm will likely construct and operate the project.

Enstar Natural Gas Co. is interested in the project, and has done its own work on a bullet line. Enstar is now contributing data and cooperating with the state's effort.

The bullet line is being planned, in concept, to be built and operating by 2015, a time when serious natural gas shortages could be facing Southcentral Alaska. However, if the big pipeline moves ahead, the project could be adjusted to build a spur line to connect with the big pipeline, Noah said.

This phase of the work is planned to be finished by next June. Funding is adequate to continue the work through February. Legislators will have to appropriate additional funds, but the amount has not yet been determined, Noah said.

The plan is to have cost estimates of several options ranging from an 18-inch pipeline that would move 250 million cubic feet per day to 24-inch pipeline that could move 500 million to 1 billion cubic feet per day.

The studies include a gas conditioning plant in Prudhoe Bay and a gas liquids processing plant in Point Mackenzie in Southcentral Alaska, which assumes the pipeline could be built to operate at high pressures, so gas liquids could be transported.

A case will also be considered for a pipeline that moves only dry gas and not liquids, Noah said.

A separate effort is underway, meanwhile, by an independent state corporation, the Alaska Natural Gas Development Authority (ANGDA). The authority is focused on a 20-inch or 24-inch spur pipeline built off the big pipeline at Delta, east of Fairbanks, through Glennallen and then to the Palmer area on a route near the Glenn Highway.

The authority now has an environmental impact statement process underway on the Glennallen spur line route.

A spur line could also be built from an area near Fairbanks to Southcentral Alaska along the Parks Highway. Noah is evaluating both routes for a spur line as well as a pipeline all the way from the North Slope.

Noah's preliminary findings were presented to state legislators in Anchorage Sept. 15.

If the big pipeline is built, a spur line would cost about $1.54 billion if built from Delta via Glennallen to the Palmer area, where it could connect with Enstar's existing pipelines.

It would cost $1.71 billion if built from the Fairbanks area along the Parks Highway.

While the Delta-Glennallen route is shorter by 31 miles and would possibly cost less to construct, Noah points out the gas must travel about 100 miles farther in the big pipe to Delta before entering the smaller spur line. Consumers would have to pay for that extra transportation.

Overall, each route has its advantages and disadvantages, Noah said. If the big pipeline is built, the Glennallen spur is shorter, but it also crosses more mountainous terrain. The Parks Highway route, however, crosses more sensitive habitat and special land-use areas, such as Denali National Park.

A Parks Highway spur line would serve more consumers along the way than a spur line from Delta via Glennallen.

"One difference is that on the Parks Highway there are coal-fired power plants that could be switched to natural gas. That could create a lot of demand," Noah said.

The plants include a coal power plant at the Clear Air Force Station's radar site and in Healy, where Golden Valley Electric Association operates a coal-fired plant. The Usibelli coal mine now supplies coal to these plants.

One downside of the Parks Highway route is that it would most likely run west of Fairbanks, so that a separate spur line would be needed to reach the Interior city.

The Glennallen route creates an option for another spur to Valdez to support a liquefied natural gas project, if one is feasible. A Parks Highway spur line, however, would make it easier to build a spur line to the Donlin Creek area in Western Alaska, where mining companies hope to build a large gold mine.

Noah's project includes a preliminary analysis of a smaller pipeline, possibly 10 inches in diameter, built about 250 miles to reach the area where the mine is being built.

Once gas is delivered to the area, a regional power station built there could serve other communities now dependent on diesel for power generation.

State legislators and Gov. Sean Parnell will weigh all these alternatives and make final decisions.

Noah's group has not yet done "cost of service" estimates for a bullet line or the alternative spur lines, but earlier studies by the U.S. Department of Energy said the costs of moving gas through the two alternative spur line routes would be similar.

ANGDA had earlier estimated that the cost of moving gas through a bullet line to the Anchorage area from the North Slope might be about $3 per thousand cubic feet, or mcf, and about $2.50 per mcf if the big pipeline is built, so that the gas moves through the big pipe to Interior Alaska and then to Southcentral Alaska through a spur line.

Moving gas to Fairbanks in a bullet line might cost about $2 per mcf, but if the big pipe were built the cost might drop to $1.25 per mcf, according to presentations ANGDA has made.

The assumption in ANDGA's estimates are that a 24-inch pipeline moving 500 million cubic feet of gas per day would be built. If smaller amounts of gas were shipped the costs would be higher, the authority said.

Tim Bradner can be reached at

tim.bradner@alaskajournal.com.