Palin supports bullet pipeline to North Slope

Proposal calls for gas project to be in operation by 2015

Posted: Monday, March 09, 2009

Gov. Sarah Palin has thrown her support behind a 24-inch "bullet" pipeline to bring natural gas from the North Slope to Southcentral Alaska.

The plan is for the project to be in operation by 2015, three to five years before a large-diameter pipeline from the North Slope to the Lower 48 can be constructed.

Anchorage and other southern Alaska communities need gas, because Southcentral Alaska gas fields are being depleted, Palin said.

"There's been a lot of talk about in-state gas but little action," Palin said at a recent news conference.

The governor has named Harry Noah to serve as special coordinator to head a state team to push the project.

Noah is a veteran state agency manager who most recently managed a state land trust that provides revenues for mental health programs.

The idea of a 24-inch pipeline built to the North Slope prompted some criticism from the state Legislature. State Sen. Bill Wielechowski, an Anchorage Democrat who co-chairs the Senate Resources Committee, questioned whether it makes sense for a small pipeline to built when a large one following part of the same route would be constructed a few years later.

Gas delivered part of the way through the large pipeline would be much less expensive for consumers in Southcentral Alaska, Wielechowski said.

Enstar Natural Gas Co., the Southcentral Alaska gas utility, is now pursuing the bullet line idea while the Alaska Natural Gas Development Authority, a state corporation, is pursuing a separate spur line that if built could link with the large diameter pipeline.

The two projects follow different routes to Interior Alaska. Enstar's pipeline would be built parallel to the Parks Highway to Fairbanks, then north along the trans-Alaska pipeline right-of-way.

ANGDA's spur line would connect with the large pipeline in Delta, east of Fairbanks, follow the oil pipeline right-of-way to Glennallen, and then follow the Glenn Highway to the Anchorage area.

Noah said his first task would be to review both routes and settle on the best option. That decision will be made by this summer, he said. The next two tasks will be to secure commitments of gas supplies on the north end of the pipeline either from owners of the Prudhoe Bay field, where there are large gas reserves, or Anadarko Petroleum Corp. and its partners, which are exploring on the southern North Slope.

The next task will be to find customers for the pipeline, he said. These would include utilities in Interior and Southcentral Alaska, as well as possible industrial customers, such as Agrium Corp. plant in Kenai if that company can re-start the shuttered plant.

Once a supply of gas and purchase agreements are in place, the next step would be detailed design and engineering, which would require about $400 million. Obtaining permits would come next.

To complete construction by late 2014, a decision to build the pipeline would be needed no later than June 1, 2011, Noah said.

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