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North Slope Borough building gas pipeline to Nuiqsut Will have less diesel to subsidize when village has access to natural gas; the borough and Kuukpik Corp. will not make a profit from gas distribution Kristen Nelson PNA News Editor
A gas cap will be built at the Alpine field with conditioned gas, officials representing the North Slope Borough told the Alaska Public Utilities Commission in a December presentation. In addition to gas injected back into the formation, approximately 500,000 cubic feet a day of gas will be piped to the village of Nuiqsut.
The gas cap could also be available to provide Nuiqsut’s needs in the event of a temporary field shut down — or at the end of field life, borough officials told the APUC.
ARCO Alaska Inc. is making the gas available to Kuukpik Corp., the village corporation of Nuiqsut, as part of a surface use agreement. And the North Slope Borough, officials said, won’t be looking to retire any costs from pipeline construction. Customers at Nuiqsut will pay because there will be a cost to operate the system, but neither the borough nor the Kuukpik Corp. intends to make a profit from gas distribution. Unlicensed utility, win-win situation The borough will donate the capital infrastructure and will operate it as an unlicensed utility. The cost to Nuiqsut of energy from natural gas will be “exceedingly less” than the cost of diesel, officials said.
And the North Slope Borough, which subsidizes diesel costs, wins because less diesel is being brought into the borough so the subsidy cost is reduced.
Borough officials said that the natural gas will displace some of the diesel used at Nuiqsut, but that diesel would still be needed for heavy equipment and power backup.
Natural gas for Nuiqsut, officials said, will be the first direct benefit from those North Slope oil fields — an opportunity for the village corporation and the North Slope Borough to take advantage of the industrial development around them.
The benefits of North Slope development have seemed very indirect when oil comes from the North Slope and has to be barged back in. This is direct, an official told the commission. Shared construction North Slope Borough officials plan to build the aboveground portion of the Nuiqsut pipeline this winter when they can make use of the same contractor and mobilization being used by ARCO to build its pipeline from Alpine to the Colville River. That much of the route is the same, and the Nuiqsut pipeline will be placed on the virtual support members of the Alpine pipeline until that line reaches the Colville River crossing. Nuiqsut is on the same side of the Colville River as the Alpine field, and from the river crossing to the village the Nuiqsut gas pipeline will be buried.
The buried portion of the line will be built in 2000 or 2001. Community facilities would be built at the same time as a water and sewer project slated to begin in two years and continue for several years. Total costs of pipeline at $10 million Officials told the APUC that costs to install the pipeline are reduced by a factor of three when the work is done at the same time that the Alpine pipeline is being constructed. Estimates for pipeline construction are $2.5 million, materials are estimated at $1 million.
If the aboveground portion of the Nuiqsut pipeline is not installed this winter when the contractor is on the ground putting in ARCO’s Alpine line, then there would be a $4 million additional cost. Ice roads would have to be put in and the contractor’s equipment and a camp mobilized to the North Slope.
The borough estimates the total cost, including distribution lines to homes, at about $10 million, and officials told the APUC that the borough is not looking to recover its capital costs, but to better life in Nuiqsut. The capital cost, the assured the commission, will not be included in charges to residents.
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