Hoping to make route decision by year end
Richard Gleeson
Northern News Services
Yellowknife (May 02/01) - Alaskan legislators may have outlawed an offshore pipeline, but the companies that own most of north slope gas have not.
Last week the gas producers group composed of BP, ExxonMobil and Phillips announced it had awarded a series of contracts aimed at assessing the feasibility of both the overland route that Alaska and Yukon legislators are backing and an offshore link to a potential Mackenzie Valley pipeline.
Curtis Thayer of the North American Natural Gas Pipeline Group, as the Alaskan producers call themselves, said the offshore route would provide greater royalties for the state.
"There's no way around it, it's approximately 300 miles shorter than the southern route," Thayer said.
"Right now we have the technology (to build an environmentally safe offshore pipeline)," he later added. Alaska and Yukon politicians maintain an offshore pipeline would pose unacceptable environmental risks. That's a position backed up by a coalition of environmental groups poised to block any attempt to go offshore.
Thayer said the Alaskan producers are well aware of the opposition to an offshore link, but it will be factored into the feasibility study in the same way as any other costs.
Separate contracts were awarded for assessment of the U.S. and Canadian regulatory regimes. Contracts were also awarded for reconnaissance of the routes.
Alaskan producers have budgeted $75 million to assess the viability of both pipelines. Environmental regulations require the group present a preferred route and an optional route. Thayer said the producers have not decided which route they prefer.
Thayer added the Alaskan producers are assessing the cost of a pipeline 1.2 metres in diameter capable of delivering 113 million cubic metres of gas per day.
Even that flow will not be able to keep up with projected growth in demand in the United States, he said.
If it does go overland, the pipeline will be the biggest in the world, longer even than the Great Wall of China.
Last spring Beaufort-Delta producers began a feasibility study of a stand-alone Mackenzie Valley pipeline. That project got a boost last Friday, when Alberta Premier Ralph Klein announced his preference for the Mackenzie Valley route, saying it would bring more benefits to his province than would an Alaska-Yukon pipeline.
Last week NWT Economic Development Minister Joe Handley met with the editorial board of the Calgary Herald. On Friday the Herald ran an editorial accusing the federal government of shirking its duty by not actively promoting the Mackenzie Valley line.
