Pipeline construction to tap North Slope natural gas in Alaska continues to inch along toward fruition as the major North Slope gas producers (BP, Phillips, and ExxonMobil) announced that the last four in a series of 10 contracts have been awarded to assess the feasibility of constructing a system to deliver gas from the North Slope to Canada and the Lower 48 states.

The announcement comes as the latest development in a more than 20-year process to retrieve North Slope gas from Prudhoe Bay. Both Canadian and U.S. government officials agreed years ago upon an Alaskan Gas Transportation System (ANGTS) route to transport gas from Prudhoe Bay south along the Alaskan Highway, across the Yukon, northern British Columbia and Alberta, and finally to export points along the U.S. border. The southern portion of the route, which extends from Alberta into the United States, is already completed (in two legs: Foothills/Northern Border Pipeline and PG&E Gas Transmission Northwest). Only the northern portion remains to be built.

But that agreement is 20 years old and there is another Alaskan route currently under consideration, the Northern Gas Pipeline Project, which was unveiled last year. It would run eastward from Prudhoe Bay and come ashore in the Northwest Territories’ Mackenzie Delta area in northern Canada, then follow the Mackenzie River south through the Northwest Territories, then interconnect with pipelines in Alberta.

Most of the players and government officials involved agree that both pipeline projects can, and should be, built because the North American market can absorb their throughput. The question becomes, which one should be built first (see Daily GPI, April 4)?

The four conceptual engineering contracts were awarded to three joint ventures, representing nine different contractors. The contracts are for engineering services for potential pipeline routes from Prudhoe Bay to Alberta; a new pipeline from Alberta to U.S. markets; a gas treatment plant located on the North Slope; and a natural gas liquids plant.

These were the contracts awarded::

The total of 10 contract packages covers a broad range of project activities and will involve several hundred contract and subcontract personnel in Alaska and Canada, BP said. The goals of the 10 contracts over next year will be conceptual design, project costing, permitting consideration, commercial structure, and the overall viability of the project. The expected budget for this evaluation project will be $75 million. The work effort is expected to be primarily managed and staffed in Anchorage.

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