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Open season for small line gets bids Energia Cura gets nonbinding nominations in excess of 12 bcf per year natural gas required to make Fairbanks Pipeline Co. feasible Kristen Nelson Petroleum News
Large users of natural gas in Alaska’s Interior could ship enough gas to support a small line from the North Slope.
That’s the conclusion Energia Cura reported after its nonbinding open season for a natural gas line from the North Slope to the Interior wrapped up Oct. 15 with what the company described as “nominations for natural gas volumes in excess of those required” to make a small-bore natural gas pipeline project feasible.
When the open season began Energia Cura said that after studying how to get reasonably priced energy to Alaska’s Interior for 10 years, it thought there might be enough demand to justify a small-bore, high-pressure gas line from the North Slope to the Fairbanks area.
The open season began Aug. 26 and was originally scheduled to close Oct. 1, but was extended to Oct. 15 “at the request of three load centers requiring additional time to submit nominations.”
The volumes nominated when the season closed Oct. 15 were in excess of the 12 billion cubic feet per year (some 33 million cubic feet per day) required “to deliver natural gas to the Interior at less than half its current cost,” the company said.
Energia Cura believes its line could be operational by 2014, and that it could save Interior residents more than a billion dollars in energy costs prior to the arrival of gas via a mainline taking ANS natural gas to market.
Gas still being sought Energia Cura said it is still in discussions with ANS gas producers to secure natural gas and natural gas liquids, as well as a compression agreement with the Prudhoe Bay central gas compression facility. An agreement with the compression facility might eliminate the need for compressor stations along its primary transmission system, the company said.
Continuing discussions with the producers are part of the second phase of the project, which began Oct. 18.
With nominated volumes in place, the company will now complete hydraulic and economic simulations based on actual volumes “to develop the final design criteria for both primary and secondary transmission segments.”
The primary segment is the line from the North Slope, a 443-mile 10-inch high-pressure line from near Pump Station 1 on the North Slope to Fox. Secondary transmission lines are high-pressure, coiled tubing feeder lines from the primary line to Interior’s industrial load centers. Major load centers identified on a map the company distributed in September were Fairbanks, Golden Valley Electric Association, Eielson Air Force Base, the North Pole refinery and Fort Wainwright.
Also in phase two is determination of bundled cost offerings — transportation and gas — for each nominating load center. Those cost offerings are a requirement to begin FPC’s binding open season.
Legislation for state participation Energia Cura said it is working on formation of a nonpartisan coalition of Alaska legislators to draft a bill which will enable state agencies to participate in exchange for an equity share commensurate with the state’s in-kind contributions. Such agency participation would include use of agency resources in securing project permits and easements along the Dalton and Elliott highway corridors.
“Most of the geophysical and statistical data required to acquire the small-bore pipeline’s permits and define its final design are already in place, through prior state expenditures on other gas developments,” Energia Cura said.
The company said it is proposing that equity positions in the project be deposited in the Alaska Permanent Fund, because it “wants all Alaskans, including those not residing in the Interior, to receive tangible benefit from ANS gas resources.”
The organization Energia Cura’s open season was done on behalf of Fairbanks Pipeline Co.; Alexander Gajdos and Thomas Chapman are principals of both companies.
Phase two includes continued organizational development of FPC, including interviews with local job applicants.
As the project advances into phase three, Energia Cura said, investors will be organized into Fairbanks Holding Co., of which FPC will be a wholly owned subsidiary. Organizational options being considered range from “simple limited liability partnerships to more complex public models issuing equity assignments through common stock,” the company said.
Energia Cura said it has met with four large Alaska firms showing early interest in securing project equity positions, but said it does not plan to release the identify of prospective investors other than first-tier equity assignments that Interior load centers may secure; the company said it has requested second-tier investors issue their own press releases.
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