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NEWS BULLETIN

September 20, 2001 --- Vol. 7, No. 122September 2001

Foothills study argues two Arctic lines cheaper and faster

A new study by Foothills Pipe Lines claims it would be cheaper by $200 million to build separate pipelines from the North Slope and Mackenzie Delta than going "over-the-top" in a single line and deliveries should start sooner.

The Calgary-based partnership of TransCanada Pipe Lines and Westcoast Energy put a price tag of $12.8 billion on the two routes and $13 billion on a line under the Beaufort Sea and down the Mackenzie Valley.

It estimated an Alaska Highway route, which it proposed in the late 1970s, could be built in six to seven years and carry 4 billion cubic feet per day, while a line from the Mackenzie Delta would open in eight to nine years and deliver 1.2 billion cubic feet per day.

An over-the-top project would take an estimated nine to 10 years and pose "critical and serious constraints" associated with the subsea portion, the study said.

To ensure a reliable flow from the North Slope, the Beaufort portion would have to be twinned, be built far enough offshore to avoid ruptures from ice-scouring and gouging and overcome strong environmental opposition which could be a "route stopper," said Foothills.

It said a limited open water season would significantly restrict the construction time and could result in cost overruns and long delays.

A Foothills' spokesman said the report makes a case that once all factors are taken into consideration the cost advantages of going over-the-top disappear.

Doug Matthews, director of the Northwest Territories oil and gas division, told reporters that producer studies show over-the-top is cheaper and doesn't require twinning under the Beaufort.

He said it was logical for Foothills, a pipeline company, to argue for two lines, while shippers would prefer one.

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