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Conditional ROW for spur expected soon Alaska Natural Gas Development Authority working on business plan, outreach to entities that might want North Slope gas Kristen Nelson Petroleum News
The Alaska Natural Gas Development Authority has participated in seven Department of Natural Resources public hearings on its proposed spur line right of way from Glennallen to Palmer, Chief Executive Officer Harold Heinze told the authority’s board April 24.
The authority is a corporation of the State of Alaska which is working on delivering North Slope natural gas for in-state use. It chose to develop a Glennallen to Palmer right of way because this was the section of a route to Southcentral Alaska for which there was not a developed right of way.
The authority applied for the right of way in April 2005 and the department issued a proposed decision this February. Chickaloon residents had expressed concerns about the right of way and ANGDA twice revised the right of way in that area, moving it north of Chickaloon on to state lands, avoiding private property in the area.
Heinze said there was interest at the meetings in access to gas, as well as concerns expressed about the impact of the line.
Glennallen residents were interested in lowering their energy costs and at Lake Louise, even though the line doesn’t come within 20 miles of the area, there was interest in taking some gas off the spur, he said, and using either propane or gas.
At Glacier View there was concern about the project’s impact “the mountain over from them,” he said.
There were two hearings in Chickaloon, with good discussion on concerns, Heinze said, and one meeting each in Sutton and Palmer. In both Sutton and Palmer people wanted to understand how the pipeline was coming through their area, Heinze said.
On one three-mile Palmer stretch “we had a very good dialogue with homeowners there,” and as a result the route was moved. “Their proposal was just so sensible it was immediately apparent that they were offering a better alternative,” he said.
The comment period on the draft right of way closed April 26.
Right of way will be conditional What the authority requested and what will be issued, probably this summer, is a conditional right of way, Heinze said. Twenty-six plans will have to be developed to perfect the right of way. Where people have concerns about such issues as re-vegetation and restoration, Heinze said ANGDA asked people to express those concerns to the Department of Natural Resources so they will be a part of the record and can be addressed as ANGDA develops its plan.
After the public comment period closes the department will deal with all the comments and issue a final decision on a conditional right of way. Heinze said he hopes to have that document this summer and the board will then decide if it will accept the conditions.
If the board accepts the conditions, Heinze said the plan is to get a couple of things working “in a matter of weeks.” These would include archaeological issues and the design for crossing Moose Creek. He said the goal would be to contract for work over the summer on about half of the 26 plan requirements. “It won’t require 13 contractors; it will require three or four contractors.” The target items would be ones “where the resources may not be available to us next year.” He said the scopes for those pieces of work have been written up.
“We’ve purposely held back the money” to get this work started, Heinze said, since you can’t even get a contract number in the state system unless you have the money.
The conditional right of way is important, he said, “because if it has a show stopper in it, we’re in trouble.” Heinze said if there is no show-stopper in the conditional right of way it will take a couple of years to do all of the work required.
Open season access issues ANGDA is about to begin an outreach on open season issues. Heinze said people at the spur line right-of-way meetings were very interested and in some areas, like Lake Louise and Sutton, would need to form organizations.
Heinze said Copper Valley Electric is very interested: “I did not have to encourage anybody in Glennallen to come to the meeting because Copper Valley Electric did.”
Two key issues for ANGDA’s business plan, Heinze said, will be whether ANGDA builds a spur line or participates in building a line.
Or, like the Wyoming Natural Gas Development Authority, simply facilitates the project. All they did was put up a line of credit, he said.
Heinze said if ANGDA could play that role it would; if it needs to design and build the spur line, it will.
That issue is unanswered, “and a lot of it has to do with who else wants to build a line” — there may be others out there, he said.
A second issue is shipping through the line: “Who makes the decision to basically buy gas, where do they buy it, how do they sign shipping agreements?” ANGDA “may have no role,” other than providing information, he said. “It may be that we end up as an aggregator. We may cut an arrangement with every utility in this area” and make the commitment so local utilities don’t get shut out.
Those decisions, Heinze said, are what ANGDA will be working through in its business plan.
Traditional business plan He said requests for proposals for a contractor for the authority’s business plan have closed and the evaluation committee is looking at the proposals and will make a decision soon. The request for proposals was to produce a traditional business plan which will be used when the authority approaches financial firms and potential partners.
At most the business plan “will have several clear alternative choices,” he said. The board will sign off on the business plan and may decide to keep only some alternatives, allowing it to make some decisions on what the organization will be in the future and roles it will play. The business plan will also be important in developing information for tariffs and open seasons and for talking with utilities.
“In particular there is certainly a focus in this business plan on making sure we’ve thought through all the alternatives,” he said, along with a lot of emphasis on analytical work.
The plan will look at the impact on the gas cost, he said: “We will do basically a cost of service analysis,” how would the authority move gas at the lowest possible cost.
Heinze said he expects to have a plan in front of the board this fall.
A half a million dollars have been budgeted for the business plan.
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