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September 2008

Vol. 13, No. 36 Week of September 07, 2008

ANGDA has RFP out for Fairbanks line

Contract would study attaching a high-density plastic line to the end of planned spur line to provide Cook Inlet gas to North Pole

Kristen Nelson

Petroleum News

The Alaska Natural Gas Development Authority has put out a request for proposals for a study of the feasibility of a Fairbanks connector pipeline.

ANGDA Chief Executive Officer Harold Heinze told Petroleum News Aug. 27 that the work is in response to Gov. Sarah Palin’s request that ANGDA see how it could help Fairbanks with energy costs. This project begins with the spur line ANGDA has been discussing, he said, and is based on the proposal to pre-build the spur line, intended to connect with a main line coming south from the North Slope to take gas to market. Two proposals for the main line — the state-supported TransCanada project and the BP-ConocoPhillips Denali project — are in the initial stages.

In July the governor said she had asked ANGDA and Enstar Natural Gas Co., the Southcentral local gas distribution company, to partner on a line that would take natural gas from Cook Inlet north to Fairbanks, providing cheaper fuel to the Interior Alaska city. Both have been looking at a gas pipeline to Southcentral.

A line moving gas out of Southcentral would also provide a new market for Cook Inlet natural gas, encouraging exploration in the basin. Because Cook Inlet natural gas is stranded — there is no way to move it to larger markets — gas is moved out of the Cook Inlet basin as liquefied natural gas; until recently it was also converted to fertilizer for sale on international markets.

ANGDA’s RFP is based on the authority’s belief that it makes sense to build a spur line before the main line because of labor availability and because having the spur line ready would allow Southcentral to receive North Slope natural gas at the earliest possible date.

Heinze said the RFP project begins with the spur line pre-build “and you tack on the end of it a plastic pipe and reverse flow the line,” bringing Cook Inlet natural gas to Fairbanks. It’s only about 20 million cubic feet a day for Golden Valley electric, he said, “but it would make a huge difference in the bills up there,” because electric power could be generated from Cook Inlet-priced gas, rather than from crude oil at prices well over a hundred dollars a barrel.

This is based on an aggressive timeline, he said. ANGDA’s timeline has always been aggressive but “if you’re going to help Fairbanks you’ve got to get with the program,” Heinze said.

RFP for work this year

The RFP, for work not to exceed $100,000, is to assist ANGDA in determining the feasibility of utilizing a flexible plastic pipe to move natural gas from Delta Junction to the Fairbanks-North Pole area.

A minimum of 20 years of Arctic pipeline alignment selection, design and construction is required.

The RFP is to help determine the feasibility of using high-density plastic pipeline as an interim (five to seven years) connection from ANGDA’s spur line terminal in Delta Junction to the Golden Valley power plant in North Pole.

The contractor would determine the pipe size and specifications for a flow rate of 20 million cubic feet a day; assess alternative routes along the trans-Alaska oil pipeline right of way and the Golden Valley Electric Association power line right of way; determine typical installation design and special designs for river and road crossings; estimate material, delivery, installation, testing and construction support costs; develop project schedule and construction schedule; and describe major decision issues for project implementation.

Proposals are due Sept. 19, the contract is expected to be awarded Oct. 2 with work to be completed by Dec. 2.

EIS RFP to come

Heinze also said ANGDA will be putting out another RFP to start gathering environmental impact statement information for the spur line. He said the Federal Energy Regulatory Commission does not have jurisdiction over the spur line — that will be under the jurisdiction of the Alaska Department of Natural Resources and the Regulatory Commission of Alaska.

The state doesn’t have an EIS process, so ANGDA will use the Corps of Engineers to do the sort of federal-EIS process that will satisfy all the agencies.

Work currently under way in the field has been expanded to include Delta Junction to North Pole along the trans-Alaska oil pipeline right of way, Heinze said, picking up the area that would be covered by the flexible line extension from the planned spur line to Golden Valley Electric in North Pole.






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