Denali — The Alaska Gas Pipeline concluded its open seasons for the U.S. and Canadian portions of its project to move Alaska North Slope gas to Canadian and Lower 48 markets.
“After two years of work, more than 700,000 man-hours and more than $150 million of private investment, I can report that Denali has received bids for significant capacity from potential shippers,” said Denali President Bud Fackrell. “As expected, the bids include conditions, some of which are outside of Denali’s control. We will carefully evaluate these bids and their conditions and continue confidential negotiations with potential shippers in an effort to reach binding agreements.”
Denali is owned by subsidiaries of BP plc and ConocoPhillips. The open season began in July (see NGI, July 12). Denali is competing against a state-sanctioned pipeline project sponsored by TransCanada and ExxonMobil Corp. (see NGI, Aug. 9). However, the phenomenon of growing shale gas supplies in the Lower 48 has cast doubt on the outlook for an Alaska gasline (see NGI, Oct. 4).
“Based on what potential shippers have publicly stated in the past, we expect their evaluations to focus on the competitiveness of Alaska North Slope gas, including factors such as gas markets, growth in North American shale gas supplies, the Alaska fiscal framework and the status of Point Thomson leases,” Fackrell said.
Denali consists of a gas treatment plant (GTP) on the Alaska North Slope, transmission lines from the Prudhoe Bay and Point Thomson fields to the GTP, an Alaska mainline that would run from the North Slope to the Alaska-Yukon border and a Canada mainline that would transport gas from the Alaska-Yukon border to Alberta. Also included would be delivery points along the route to help meet local demand in Alaska and Canada. The cost estimate for the GTP and the pipelines is US$35 billion.
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