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ANGDA promotes in-state gas options
Mary Odden Copper River Record
Far from special legislative session debates over the troubled PPT, the Alaska Natural Gas Development Authority is quietly focused on making North Slope natural gas available to Alaska residents, utilities and industrial customers.
At an Oct. 24 board meeting, ANGDA CEO Harold Heinze said the gas authority is putting the final touches on a plan which is “attachable” to the gas pipeline project of whichever entity earns the license to take Alaska gas to market. The licensee will be selected in the state’s Alaska Gas Inducement Act process, which will take gas pipeline project applications through Nov. 30, then turn final approvals over to the state legislature in January.
ANGDA’s AGIA application addendum is scheduled to be completed by the end of October and will be made available on its Web site: www.angda.state.ak.us.
Three major applications Heinze says he expects at least three major gas line construction applications will be submitted to the state under the AGIA process. In addition, Heinze said he would not be surprised to see a “non-conforming application” submitted by one or more of the major gas lease-holders on the North Slope.
A gas lease-holder might submit a non-conforming application in objection to some of the AGIA provisions regarding the leases, Heinze said, but “it would be inconceivable to me if they don’t turn in any plans at all.”
After Nov. 30, “expect to see competition between prospective gas line builders turn into cooperation,” he said, “because whoever is going to build the gas main line has to think about in-state gas. That’s like an intelligence test.”
The process of choosing a licensee will begin with the regular session of the Alaska Legislature in January, but may take weeks or months. After a license for a gas pipeline is issued, the license holder will initiate an “open season” of 60 or 90 days, during which prospective users of the gas will commit to buy the future volumes. Commitments made in the open season determine future pricing structures and the configuration of the main and distribution pipelines.
ANGDA offers in-state plan Whether Alaska issues a license for gas to go down the Alaska Highway, to Valdez to be shipped as LNG or both, ANGDA will offer the licensee a detailed plan for in-state pipeline construction which will work with off-takes from their main line plans, Heinze says. For an Alaska Highway route pipeline, the ANGDA plan would attach the spur line at Delta. For a main line plan which brought gas to an LNG plant and export facility in Valdez, or a “Y-line” concept plan which sends gas both down the highway and to Valdez, the ANGDA spur line would attach at Glennallen.
Either form of the ANGDA application addendum is in compliance with AGIA, Regulatory Commission of Alaska and Federal Energy Regulatory Commission rules, and features conditional right-of-way permissions from the State of Alaska in place along its Glennallen to Palmer route.
The ANGDA addendum describes an Alaska gas spur line with three possible construction segments: from Delta Junction to Glennallen; from Glennallen to Palmer; and from Palmer to the Beluga electrical generation facility. Importantly, the Beluga gas field will serve as reservoir storage and provide consistency in line pressures for the gas, necessary because of seasonal and other fluctuations in residential heating and electrical power generation needs.
The spur pipeline (estimated cost $1.25 billion for the Delta-Beluga line, or $725 million for the Glennallen line, including off-takes and storage facilities) could be built without subsidies from the state, Heinze said, but the state would guarantee the gas supply.
Based on its analysis of gas market demand through 2025, ANGDA says the gas field reserve amounts (3 tcf) required for in-state use matches up with either the state’s current royalty portion of Prudhoe Bay gas or projected new gas field developments. The spur line plans currently call for a 24-inch pipe, substantially smaller in diameter than the main gas pipeline because the required volumes are about 5 percent of the expected total gas volumes in the main line.
Earliest in-state gas 2014 ANGDA’s role in the AGIA process, says Heinze, is “to make sure that Alaska’s 5 percent is not the last 5 percent.”
In-state gas market projections suggest that either the Delta-Beluga or Glennallen-Beluga alternatives are financially feasible, assuming only residential and utility consumers. The addition of Alaska industrial customers would further lower the cost per Btu to the consumer. With two field seasons and requisite permitting ahead of any configuration of spur project, Heinze said his nearest estimate for in-state gas flowing to consumers from the North Slope is the year 2014.
ANGDA, created in the election of 2002, is a public corporation of the state, with two employees and a seven member board of directors appointed by the governor.
Among ANGDA’s activities in the coming months will be open season training workshops for utilities and other prospective customers of the gas pipeline volumes. The workshops will be offered in conjunction with the Alaska Power Association, and will culminate in a “practice open season.”
At the Oct. 24 meeting, ANGDA also introduced the project manager of its Yukon-Kuskokwim Propane Demonstration Project. Bartz Englishoe will work with the village of Tanana to convert private and public buildings to propane for electrical generation and heating. The demonstration project looks forward to the availability of propane fuels extracted from a natural gas pipeline at a Yukon River off-take, and made available to interior communities via river barge.
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