October 04, 2010 --- Vol. 16, No. 87October 2010

Denali receives ‘bids for significant capacity’

Denali—The Alaska Gas Pipeline, concluded its open seasons today for both the U.S. and Canadian portions of the project.

“After two years of work, more than 700,000 man hours and more than $150 million of private investment, I can report that Denali has received bids for significant capacity from potential shippers,” Denali President Bud Fackrell said in a statement issued this afternoon.

“As expected, the bids include conditions, some of which are outside of Denali’s control. We will carefully evaluate these bids and their conditions and continue confidential negotiations with potential shippers in an effort to reach binding agreements,” he said.

Fackrell said Denali’s next steps will be determined by commitments its customers are willing to make.

“Based on what potential shippers have publicly stated in the past, we expect their evaluations to focus on the competitiveness of Alaska North Slope gas, including factors such as gas markets, growth in North American shale gas supplies, the Alaska fiscal framework and the status of Point Thomson leases,” he said.

The Denali project includes a gas treatment plant on the North Slope, transmission lines from the Prudhoe Bay and Point Thomson fields to the GTP, an Alaska mainline from the North Slope to the Alaska-Yukon border and a Canada mainline from the Alaska-Yukon border to Alberta.

Delivery points are included along the line to help meet local natural gas demand in Alaska and Canada, the company said.

Denali’s cost estimate for the GTP and the pipelines is some $35 billion.

Denali is owned by subsidiaries of BP and ConocoPhillips.

ANS September production up over August

Alaska North Slope crude oil production averaged 626,357 barrels per day in September, up 15.8 percent from an August average of 540,947 bpd, driven primarily by completion of summer maintenance and all North Slope fields producing every day of the month for the first time since May.

The BP Exploration (Alaska)-operated Northstar field had the largest percentage increase, up 179.2 percent. Northstar averaged 17,137 bpd in September, up from an average of only 6,137 bpd in August.

The BP-operated Lisburne field averaged 26,575 bpd in September, an increase of 42.1 percent from August production of 18,699 bpd. The BP-operated Prudhoe Bay field averaged 309,173 bpd in September, up 22.4 percent from an August average of 252,529 bpd.

The Kuparuk River field, operated by ConocoPhillips Alaska, averaged 142,789 bpd in September, up 6.9 percent from an August level of 133,527 bpd. The ConocoPhillips-operated Alpine field averaged 91,712 bpd in September, up 2.1 percent from an August average of 89,810 bpd.

BP’s Milne Point field averaged 27,459 bpd in September, down 1.7 percent from an August average of 27,931 bpd. The BP-operated Endicott field averaged 11,512 bpd in September, down 6.5 percent from an August average of 12,314 bpd.

See stories in the Oct. 10 issue of Petroleum News, available to subscribers online at noon, Friday, Oct. 8 at

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