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Deal for the steel

Pipe ordered years in advance

Terry Halifax
Northern News Services

Yellowknife (Aug 08/03) - The steel required for a Mackenzie Valley natural gas pipeline will require so much metal the project must be tendered years in advance of actual construction.

The preliminary engineering suggests a 30-inch main pipeline would run the 1,300 kilometres through the Mackenzie Valley and into northern Alberta.

The three major gas fields at Taglu, Parson's Lake and Niglintgak would be funnelled into the gathering system by a series of 12-inch, 16-inch and 26-inch diameter pipes.

Arnold Martinson, logistics and infrastructure lead for the Mackenzie Gas Project (MGP), said the actual tendering of the project is still "a couple of years" away, but it is part and parcel of the project's definition phase that is currently being conducted.

"We're trying to nail down a time frame we need before we can go and get this stuff," Martinson said, adding that the pipe would be delivered in stages, as required.

"We certainly don't need it all at once; we couldn't handle it all at once," he said. "It would probably be delivered over a two-year program."

The tender would go to one steel mill, and they would have to order the pipe two years prior to construction, with deliveries coming in stages.

"You wouldn't want to store more than you think you could use on that subsequent winter construction season," MacKay said. "There's only so many rail cars, there's only so many barges and we don't want to commit anymore than we have to."

Dave MacKay, Inuvuialuit and Gwich'in advisor for MGP, said long before the job is tendered, the project has to receive the necessary certification.

"We need to get the application through regulatory approval before you make an order of this magnitude," MacKay said.

They have discussed the project with most North American steel producers, whom they would prefer to deal with rather than have to ship the steel from overseas.

"It's a lot easier to transport the pipe by rail right from the mill here in North America, but we'll have to see what the world-wide market can offer for price and delivery time," Martinson said.

While the large diameter and thick-walled pipe is a bit of a specialty item, several mills are capable of producing quantities on the scale required.

"There is pipe like this already in the North American marketplace," he said. "It is a higher strength steel, but it's still within today's technology."

Alongside the 30-inch line, the project has now been expanded, to include a 10 to 12-inch line that will carry petroleum liquids from the Inuvik compression station to Norman Wells.

"The liquids from that line would probably enter the existing Enbridge line in Norman Wells," MacKay said.

One of the largest pipe producers in North America is Ipsco, who produce 3.5 million tonnes of steel per year and 1.75 million tonnes per year at three plants located in Iowa, Alabama and Regina.

Ipsco produced the pipe for the 3,700-kilometre Alliance Pipeline which runs from Fort St. John, B.C. to Chicago.

The Canadian portion of the line has 339 kilometres of 42-inch and 1,220 kilometres of 36-inch diameter steel pipe. On the American side, there are 1,429 kilometres of 36-inch diameter steel pipe.

David Britton, vice- president and general manager of tubular products for IPSCO Inc. in Lisle, Ill., said they have had some preliminary discussions with producers over manufacturing both the Mackenzie line and the Alaska line.

Britton said the Alliance Pipeline was a larger project, but the Mackenzie line would be more complex because of the delivery route.

If the pipe is not of an unusual thickness or diameter, he said Ipsco wouldn't require any lead time to tool up for the job.

"It all depends on two things: our ability to produce and their ability to transport," he said. "Logistically, it's very complex."

He said two years is an acceptable lead time for an order of this size.

"We're getting in-service dates from 2008 to 2011 and they are talking about two to three construction seasons," Britton said. "If we started making pipe in year one, that may be installed two years hence."

As with the Alliance Pipeline, Britton said Ipsco's Regina facility would produce the 80-foot lengths of pipe and send it north by rail to be barged up the valley from Hay River.