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Report says small Interior communities likely gasline access candidates

Posted: November 29, 2011 - 12:01am  |  Updated: November 29, 2011 - 12:03am

A big natural gas pipeline intended to sell Alaska’s vast natural gas reserves outside the state could also provide relatively cheap natural gas even for small communities, a consultant said Monday.

The state-sponsored Alaska Pipeline Project has long been thought to be able to provide efficient off-take points from the main line for large users like the cities of Fairbanks and Anchorage. The state’s consulting firm, Black & Veatch, said the costs of taking gas off the main line would be low enough that it would be cost-effective even for smaller communities.

While some issues, such as reducing main pipeline pressure to low household pressure will remain, the report said tapping into the pipeline as it is being constructed would have fairly low capital and operating costs.

The total cost of the pipeline has been estimated at between $28 billion and $40 billion, with the lower number for a liquefied natural gas export line to Valdez, and the higher number for an overland route to Alberta, Canada, to connect into the U.S. Midwest’s pipeline system.

The report recommended the installation of multiple “stubs” to facilitate later hookups. The stubs, at a cost of $150,000 to $200,000, if they are installed during construction, the report said.

The ongoing operations and maintenance costs would be about $50,000 to $75,000 a year, Black & Veatch said.

“Due to the relatively inexpensive budgetary estimate costs of the recommended small diameter stubs associated with installation, operations, and maintenance costs, Black & Veatch recommends installation of stub taps during pipeline construction to facilitate maximum flexibility for access to the communities along the APP,” the report said.

The Alaska Pipeline Project is being pursued by TransCanada Corp., which won state backing for the project under the Alaska Gasline Inducement Act. Exxon Mobil Corp. is partnered with them.

Other projects being advocated include a long-stalled large-diameter export line to Valdez and a small-diameter line to Anchorage, which received a subsidy by the Alaska Legislature during the last session.

Another pipeline plan, to the Midwest, was called Denali and was supported by ConocoPhillips Co. and BP p.l.c. It was abandoned earlier this year.

Under the terms of AGIA, the APP line is required to provide a minimum of five off-take points along the pipeline as the state tries to reduce high heating and other energy costs in Interior Alaska.

The Black & Veatch report suggests the costs of serving multiple communities along the route will be so minimal it can be easily accomplished, even though none are likely to be very profitable markets to serve.

Among the larger of the small communities that might benefit from using the pipeline’s gas for local uses are Livengood, Delta Junction and Tok, the report said.

• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.

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