One of the bidders for the Alaska natural gas pipeline project, AEnergia LLC, has experience going back nearly 30 years in earth sciences and environmental work for a gas pipeline out of Alaska, and could get people out in the field in the spring to do the advance work necessary for pipeline design.
“No project ever gets the earth sciences out far enough in front of it. Then, once design happens, earth sciences is always finding something where design has to change,” AEnergia executive Bill Burkhard told NGI. “We’re prepared to get folks out in the field this spring if we’re licensed.” It will essentially be a matter of going over old ground with new technology for Burkhard and his team, many of whom were involved in scoping the hydrology, geology, geotechnical engineering climatology, and thermal modeling for the first major push in 1979-1982 to build a natural gas line out of Alaska.
The group disbanded and dispersed when that effort failed, but Burkhard rounded a number of them up again in 2000 when a major natural gas line again became a possibility. They joined with Tabor Consultants, California’s oldest geotechnical firm, forming a company called GSS/TC based in Sacramento, CA, and started talking with Alaska state officials, producers, project designers and potential pipeline sponsors. “We were trying to position ourselves close to folks who might be building this.”
Burkhard said a number of the potential project participants had had discussions early on, but when the state instituted the bidding process under the Alaska Gas Inducement Act (AGIA), those talks broke off, and it was difficult to discern who would be building the pipeline. “It came down to the point where if we wanted to go ahead and work on this thing, we would have to put in the application ourselves. That’s where AEnergia came from.”
The AEnergia company was created on the day their project application was submitted in the state-sponsored competition. There were four other conforming bids from TransCanada Corp.; Sinopec, or the China Petroleum and Chemical Co.; Alaska Gasline Port Authority (AGPA), a consortium of municipalities; and the Alaska Natural Gas Development Authority (ANGDA). Outside opposition already has surfaced against the Sinopec bid, and the ANGDA project consists only of an in-state spur line (see NGI, Dec. 10).
There also has been a nonconforming bid from ConocoPhillips, owner of a little more than a third of the North Slope reserves. The other major producers declined to bid, but have said they will look at the ConocoPhillips plan.
The producers have said they can only commit to a project where there is fiscal certainty regarding state taxes. That is hard to achieve through legislation since the next legislature can change the rates; it would most likely be achieved through some kind of a contract, one Alaska political observer said.
Burkhard believes the negotiation process among the various interested parties may revive again after the state opens up the plans for comment by the public. A special team is reviewing the bids and the governor’s office has indicated it expects to have an initial pronouncement before the end of the month. The process will then be opened to the public for comment for 60 days.
While AEnergia is strong on the advance earth sciences work, Burkhard, a geotechnical and electrical engineer, acknowledged that other elements would be needed to complete the project. He said his firm is negotiating for financing and pipeline construction. However, it is likely whatever emerges as a viable project will be a combination of the strengths of several of the would-be project sponsors. And that is just the beginning.
“This time around the construction engineering and project management resources are really scarce. That field is running near capacity.” Burkhard said one engineering firm executive told him that he had 2,500 people working, but he wished he had 3,500 — he didn’t know how he was going to get all the work done that was scheduled. This is going to be a real effort to round up the resources on the ‘steel’ side.”
Actual construction will not be easy either, Burkhard said, pointing to the extreme Alaska conditions. Work on the tundra will have to be done in the winter when it is frozen. “This will be different than the REX [Rockies Express] pipeline. There are significant portions of the line that will have to be built in winter. That’s when your efficiency goes way down.”
So, for an Alaska gas pipeline it’s been 28 years, and counting.
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