ExxonMobil in Alaska: Pipeline cost jumps by billions

When the Prudhoe Bay leaseholders initially proposed the pipeline in 1969, the estimated cost was $900 million, and the pipeline was targeted for completion by 1972. Five years of political battling got in the way of timely completion, in itself contributing to the final cost of the line.

By January 1970, the projected cost had risen from $900 million to $2 billion.

In October 1973, Alyeska Pipeline Service Co. released a new cost estimate of between $3.1 billion and $3.5 billion, noting those amounts could increase by $1 billion.

In 1974, Alyeska released its most detailed cost estimate to date: $5.982 billion.

By 1975, the year construction began, that number had again risen, this time to $6.4 billion — $3 billion of which was due to inflation, while another $2 billion was due to environmental costs.

During the second year of construction, in July 1976, the project’s cost estimate was increased to $7.7 billion, reportedly due largely to material and freight costs and contingency estimates.

The final construction cost was $8 billion, but did not include interest on investment loans, the cost of improvements and repairs, additional pump stations built between 1977 and 1980, or upgrades after 1977.

The percentage of the pipeline owned by various companies has changed over time, but as of 2009, the primary owner was BP, which controls 46.93 percent of the line. The second largest owner is ConocoPhillips Transportation Alaska Inc. with 28.29 percent, followed by ExxonMobil at 20.34 percent, Koch Alaska Pipeline Company at 3.08 percent, and Unocal Pipeline Company at 1.36 percent).

—Wikipedia.com information was used in the above