February 01, 2001 --- Vol. 7, No. 16February 2001

North Slope gas to Southcentral at current Enstar prices?

Jeff Lowenfels, president of Yukon Pacific Corp., told the House Special Committee on Oil and Gas Feb. 1 that Yukon Pacific believes cost estimates for a spur gasline from Glennallen to Sutton, connecting with the existing Southcentral gas transportation system, could deliver Alaska North Slope gas to the area at about what Enstar is now paying, and still allow a "favorable" wellhead price to the producers.

Kenai Mayor John Williams had just told the committee that Cook Inlet is currently estimated to have nine years of gas supplies remaining. North Slope gas, Williams said, is a survival issue for Southcentral.

Lowenfels said that Yukon Pacific has been running the numbers to see what it would take to get North Slope gas to Southcentral in a 16-inch spur line from Glennallen. Those numbers are still a work in progress, but, he said, it looks to Yukon Pacific right now as though North Slope natural gas could be delivered to Southcentral for the same price Enstar now pays and at an "extremely favorable" price to the producers.

And, Lowenfels said, the numbers Yukon Pacific is looking at right now for delivery of natural gas along the pipeline show Fairbanks would be getting fuel cheaper than Anchorage.

He told the committee that Yukon Pacific numbers show that the most financial benefit to the state would come from a liquefied natural gas project shipping LNG to the Far East. Gas for instate use would be provided from the gas pipeline to Fairbanks and Valdez, and to Southcentral by a spur line. Lowenfels also said that Yukon Pacific had been approached by companies who want to deliver natural gas to Southeast Alaska from Valdez.

Yukon Pacific believes economics dictate a gas pipeline to Valdez first, he said, then a pipeline to the Lower 48 if gas prices there remain high enough to support the project and if Lower 48 needs are not met from other sources.

Committee Chairman Scott Ogan is taking testimony on two bills to amend the Stranded Gas Act, which as passed addressed only a liquefied natural gas project. Ogan said the producer group working on gas commercialization would be making a presentation to the committee Feb. 8.

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