Gas plant for Denali pipeline proposes big things

Report: construction would require largest sealift in state's history

Posted: Sunday, November 15, 2009

ANCHORAGE - The Denali gas pipeline project proposes to build the largest gas treatment plant in the world on Alaska's North Slope, according to a report sumitted to state legislators.

The 22-page report submitted Thursday says the construction would require the largest sealift of equipment in state history, according to the Anchorage Daily News.

State officials published an update on the competing plan from TransCanada Corp. earlier this month.

Both Denali and TransCanda plan to publish shipping rates next year when they will try to get North Slope producers to commit their gas to a line.

The state awarded TransCanada, a Canadian gas pipeline company, a license last year to develop the North Slope pipeline. Exxon Mobil Corp., the single biggest holder of gas reserves on the Slope, joined that project in June.

Denali was launched by the other two major gas leaseholders on the Slope, BP PLC and ConocoPhillips.

In Thursday's report, Denali said it has 95 people working on the project. That's roughly the same number at work on TransCanada's project.

In response to speculation about dimming prospects for natural gas in light of shale gas in the Lower 48, Denali said long-term forecasts of future gas prices have not changed much in the past six months.

On the other hand, the Denali report said, the recent volatility of prices and the potential availability of massive amounts of gas in the Lower 48 "highlighted the market risk" of the North Slope project.

The U.S. Energy Information Administration recently issued a report saying that oil and gas resources in the Arctic are difficult, expensive and controversial to develop, and that the globe's "potentially large shale gas resource could significantly defer the future development of Arctic natural gas resources."

In the past year, the key Lower 48 price of natural gas has ranged from $6.84 per million BTUs of energy to $1.88, with the price settling at $3.23 Thursday.

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