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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2009

Vol. 14, No. 7 Week of February 15, 2009

Denali, TransCanada, provide updates

Denali awards contract for pre-FEED phase of gas treatment plant; TC Alaska will also begin GTP engineering early this year

Kristen Nelson

Petroleum News

Competing proponents of a North-Slope-to-market natural gas pipeline have been updating legislators and the public on the projects.

TransCanada Alaska has applied for permits for winter geotechnical work for both the North Slope and in the Fairbanks North Star Borough to assess soil types. TC Alaska has the state’s Alaska Gasline Inducement Act license to move a project through Federal Energy Regulatory Commission certification.

Denali – The Alaska Gas Pipeline LLC, the joint venture of BP and ConocoPhillips, awarded a contract Feb. 10 for pre-FEED, front-end engineering and design, for the gas treatment plant on the North Slope to a joint venture of Fluor WorleyParsons Arctic Solutions. Denali said the contract covers services required during the initial design phase of the GTP project, with major contract elements including a series of technical studies, development of the project design basis, project execution planning, cost estimating, schedule development and other services.

“These companies both have Alaskan operations, significant Arctic and North Slope experience, and possess unrivalled knowledge and capability in the design and construction of mega projects in Alaska,” Dave O’Connor, Denali vice president and GTP general manager, said in a statement.

“The Alaska content is further strengthened with the inclusion of CH2MHill to assist with constructability studies,” O’Connor said.

Fluor said the pre-FEED effort will be led from the firm’s Alaska operations center and will maximize Alaska-based engineering and technical resources.

“We have worked in Alaska for decades and we believe that Fluor WorleyParsons Arctic Solutions brings world-class engineering and technical expertise to this gas treatment plant project,” said David Seaton, president of Fluor’s Energy & Chemicals Group.

Robert Edwardes, managing director US and Latin America/Caribbean for Worley Parsons said the company “will apply our technical expertise from four continuous decades of work in Alaska to develop a sound project concept and execution plan.”

TransCanada has beginning pre-FEED for the gas treatment plant on its schedule for the first half of this year.

The FERC connection

Denali has pre-filed with the Federal Energy Regulatory Commission for its certificate of convenience and necessity. TransCanada has not, and Tony Palmer, president of TC Alaska, got some questions on that at a House Resources Committee meeting Jan. 26.

Rep. Paul Seaton, R-Homer, asked Palmer about FERC’s encouragement of pre-filing.

Palmer said FERC continues to wish that TransCanada would pre-file and said TransCanada continues discussions with FERC on pre-filing.

Pre-filing with FERC is on TransCanada’s schedule for 2011. Palmer said TransCanada is in control of cost and schedule now, but once they pre-file with FERC, some of that transfers to the agency. He said TransCanada is not ready to change its 2011 scheduled pre-filing at this point.

Asked by Seaton what elements transfer to FERC, Palmer said that stakeholder engagement is something TransCanada is doing directly now, but that once it prefiles, FERC would have greater involvement. He said they would normally retain a third-party contractor, selected by FERC but paid for by TransCanada, to coordinate with lead agencies.

Palmer said FERC’s third-party contractor would oversee the environmental impact statement. It is a substantial contract FERC would be letting, he told Seaton, and is in FERC’s control once TransCanada prefiles.

Palmer said TransCanada is open to discussing a number of matters with FERC, and hopes to be able to reach solutions over the next couple of months. The company’s discussions with FERC to date have been positive, Palmer said.

Rep. Peggy Wilson, R-Wrangell, asked Palmer when the company normally pre-files with FERC.

Palmer said TransCanada has 12,000 miles of pipeline in the United States and is very used to dealing with U.S. agencies.

“It has been our experience that prefiles occur post-open season” for gas pipelines, not prior to open season, he said, and that is the basis of the TransCanada schedule that has pre-filing occurring in 2011, following the company’s 2010 open season.

Palmer said FERC has told TransCanada what they told the Legislature last year, that they wish TransCanada would pre-file before open season. He said the company will continue those discussions with FERC, but the usual procedure in the U.S. is to pre-file after open season for gas pipelines.

Wilson asked if the pre-file request was just for the Alaska line, or on other U.S. pipelines TransCanada has done. Palmer said he hadn’t worked on U.S. pipelines, but was not aware that FERC had requested pre-filing on those projects, just on the Alaska line.

Denali limited

Gary Gustafson, who is working permitting issues for Denali, told the Alaska Forum on the Environment Feb. 3 that Denali took the Alaska Gas Producers Gasline Team route off the shelf and is improving it.

The Denali gas pipeline will be buried and chilled, Gustafson said, except at major river crossings and in areas of high earthquake risk. He noted how much the trans-Alaska oil pipeline shifted on its above-ground supports — as it was designed to do — during an earthquake in the Interior. A gas pipeline would be subject to the same stresses from earth movement, he said, so in those areas it will be above ground.

Gustafson said Denali would soon be announcing the gas treatment plant pre-engineering contract (see above) and said the pre-engineering contract for the North Slope to Alberta pipeline would also be awarded this year.

He also said Denali is working with the Alaska Department of Transportation and Public Facilities on infrastructure requirements, and noted that much needs to be updated or replaced.

Denali did summer fieldwork out of Tok last summer and this summer it will be working at the northern end at Atigun camp, Gustafson said, so the impact of summer work would be in the Coldfoot-Deadhorse area.






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