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Analysts say Mackenzie gasline first Conoco marketing analyst James Duncan says there is not enough steel-producing capacity in North America to allow both lines to be built simultaneously Gary Park PNA Canadian Correspondent
Two more gas industry analysts have delivered long odds on early construction of a gas pipeline from Alaska in the near future. Speaking to outlook conferences in Calgary in March, Conoco Inc. marketing analyst James Duncan and DRI-WEFA consultant James Osten gave negative assessments of the prospects for Alaska gas development.
Duncan said there is not sufficient steel-producing capacity in North America to allow simultaneous construction of Alaska Highway and Mackenzie Valley pipelines.
But he felt certain both would eventually be built.
Commenting on a recent meeting with Alaska Gov.. Tony Knowles, Duncan said he now believes an Alaska pipeline is “a political thing — dollars mean nothing.”
The stockholders of Conoco and Phillips Petroleum Co. recently approved a merger between the two companies. Phillips is one of the big three gas owners on Alaska’s North Slope; Conoco is a major player in the Mackenzie Delta.
Osten said Alaska gas “is a possibility in the long-term forecast but it certainly is not economic at the present time.”
He doubted a highway pipeline would come on stream before 2011 or 2012.
Osten said he has always through Mackenzie Delta gas would be developed first because it is closer than Alaska gas to market and the supply would fit into available pipeline capacity in Alberta. Alaska gas last He said DRI-WEFA has calculated than Alaska gas, at a cost of $3.75 to $4.50 per million British thermal units, would be the last to reach Chicago.
On the demand front, Osten said “forecasts should be viewed very carefully,” but he is optimistic North American demand will reach 28 trillion cubic feet by 2010, up almost 50 per cent from current levels.
Brad Sparkes, manager of business development for independent power producer Calpine Canada Ltd., said more efficient turbines will further boost demand at gas-fired generating plants.
He said that 90,000 megawatts of new capacity has been built across North America in the past four years, of which 95 percent is gas fired and requires about 2.6 trillion cubic feet a year. Another 105,000 megawatts are under construction.
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