Alaska gas could be in pipeline by 2008, says BP vice president

Gary Park

North Slope gas could be flowing to the Lower 48 within seven years, if issues of economics and route selection can be sorted out, said Jim Farnsworth, BP's vice president of North American exploration.

He told a Ziff Energy Group gas strategies conference Nov. 5 that it is “technically feasible” for a pipeline to be in service by the fourth quarter of 2008. But it is up to the market to determine the timing and a “number of players” to help settle on the route.

Without declaring a preference for either the Alaska Highway or “over-the-top” options, Farnsworth noted that a line from the North Slope, under the Beaufort Sea and along the Mackenzie Valley would allow Alaska to share about 1,100 miles of right of way with the Mackenzie Delta gas.

He said that route would “obviously have the benefit” of savings, but conceded that the Alaska government sees a highway pipeline as its best hope of opening other gas fields in the state and increasing royalty revenues.

“Clearly, the people of Alaska and the government of Alaska have a huge interest in this, both for revenue reasons but also for providing a gas resource for Alaskans,” said Farnsworth.

BP, ExxonMobil and Phillips Petroleum, the North Slope partners, have put pipeline construction costs at $15.1 billion for an “over-the-top” system and $17.2 billion for a highway pipeline, with either project capable of delivering up to 5 billion cubic feet per day.

Speaking to the same conference, Vicky Bailey, assistant secretary of policy and international affairs at the U.S. Department of Energy, said Washington views Alaska gas as vital to its plans for reducing dependence on imported oil from the Middle East.

She said the government does not consider any pipeline proposals to be dead.