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Enbridge touts alternative to massive single gasline from North Slope Proposes twin 36-inch diameter lines rather than a single 52-inch sysytem to reduce financing costs, speed up deliveries, allow pipe to be made in North America; convinced there are no technical obstacles to offshore route to maximize Arctic potential Gary Park PNA Canadian Correspondent
Calgary-based Enbridge Inc., convinced about the looming need for gas from the U.S. and Canadian Arctic, is making a quiet, yet persistent case for an offshore delivery system as cost projections for the Alaska Highway project have climbed.
Wayne Sartore, vice president of northern pipeline development at Enbridge, told a Gasfair Power 2002 conference in mid-May that from a technical perspective an over-the-top route is “absolutely constructable and operable ... end of story.”
He said Enbridge and other pipeline companies have studied several options for offshore pipe.
“It’s been done all over the world,” Sartore said. “If we don’t have a solution for this, then there’s a lot of exploration in the future that will never come to market.”
If an offshore pipeline is ruled out for technical reasons “you can write off the Arctic Islands and I certainly not about to do that and I don’t think we are as an industry.” Offshore Canadian Arctic vital He told the conference that the U.S. and Canadian Arctic (including Alaska, the Arctic Islands and Mackenzie Delta) is one of three frontiers — in addition to the Gulf of Mexico and Canada’s east Coast offshore — that are vital to North America’s future gas supplies.
He said it is “pretty common knowledge” that the continent’s traditional gas basins are “having a tough time keeping up,” because of annual decline rates of 20 percent to 25 percent on new wells. “You have to do a lot of work just to stay even.”
Sartore said the industry is certain “there’s a lot of gas” in the Arctic Islands and, although estimates are still preliminary, the Canadian Gas Potential Committee said the region gas 31 trillion cubic feet of gas in place.
Of the rival groups proposing a northern pipeline, he said the Mackenzie Delta Group has achieved noticeable progress.
“This group has been pretty steady. They’ve taken steps forwards ... for the last two years and moved from a feasibility study to a project-definition study,” by committing C$250 million to develop a regulatory application which h expects will be filed about mid-2003. Northern pipeline will take longer But he warned anyone against applying southern models to the northern environment, where a pipeline project could take up seven years, including planning, regulatory hearings and construction, to complete against the more normal two years in the rest of North America.
“These are complex, difficult pipeline projects, and expensive, with lots of risk,” Sartore said.
He does not expect gas to be flowing from either the North Slope or Delta before 2008, given the harsh environmental challenges of constructing and operating a system.
To that end, Enbridge is advocating twin 36-inch diameter lines, rather than a single 52-inch system.
They would be built consecutively, linking the North Slope and Mackenzie Delta basins, with capacity up to 5.2 billion cubic feet per day.
Single line would use more steel In contrast Enbridge said the Alaska Gas Producers Group, with capacity of 5.6 billion cubic feet per day, would need 3 million tons of steel compare with 2.4 million tons for the smaller twins and would have walls 1.128 inches thick, nearly double the thickness of the smaller twins.
The company said two pipes could not only be produced in North America, but construction would be staged, with the first line taking two years to build and available for deliveries, while a 52-inch line would take at least three years of construction.
As a result, the project sponsors would pay less interest in the money raised to finance the project. Line would be in shallow water On the environmentally-sensitive issue of a pipeline across the Beaufort Sea, Enbridge has proposed a line in about 15 feet of water and 6.5 feet below the seabed, rather than the ArctiGas Resources Corp. plan for a line in 88 to 150 feet of water. It claims that would reduce the risk of “scouring” from large masses of ice which can scour the seabed in deeper waters, but it usually broken up by the time it reaches the shoreline.
Enbridge, which operates the world’s longest crude oil pipeline across North America, bases its arguments on 17 years of building and operating the only major pipeline out of the Northwest Territories.
Sartore also made a case for close examination of shipping tolls on a northern pipeline, arguing that the proposed C$2 per thousand cubic feet would be a “huge chunk” of the overall cost given the cyclic nature of gas prices.
Enbridge chief executive officer Pat Daniel has previously challenged those who have rejected an over-the-top pipeline is unsafe and environmentally dangerous.
“We have taken a careful look at the offshore route and believe it is feasible and safe,” he said.
A Salomon Smith Barney report last year concluded that “successful pipelines are currently operating off the coasts of Finland and Russia in similar Arctic conditions,” said Daniel.
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