Alaska's plan to build a 24-inch "in-state" gas pipeline from the North Slope to southcentral Alaska has been set back by delays in funding by the state Legislature, the CEO of the state-owned Alaska Gasline Development Corp. said Friday.
The project will not hold an open season in late 2013 to gaugue interest from shippers, Dan Fauske, president of AGDC, said in an interview.
There is no new target date for the open season.
The state-owned AGDC is on schedule to secure its major permits, however. A federal Environmental Impact Statement is expected to be finalized in September, Fauske said.
Also, discussions are on track with TransCanada Corp. and major North Slope gas producers on ways of merging the state's project with a proposed large-diameter gas pipeline built from the North Slope to a natural gas liquefaction plant in southcentral Alaska.
Gov. Sean Parnell had asked TransCanada and the producers for a report on their assessment of a pipeline and LNG project by September 30, and for a plan to merge the state's effort for its in-state pipeline with the industry's larger project.
"Having the EIS complete is worth a lot in merging our efforts with those of TransCanada and the producers because the work we have done will save them a lot of money," Fauske said.
Planning for the AGDC 24-inch pipeline project was launched two years ago as a contingency to deliver North Slope gas to communities in interior and southern Alaska in case the larger industry-led pipeline effort does not move forward.
Fauske said that if the industry project does advance, AGDC would refocus its project to become a spur line to southcentral Alaska from the larger pipeline.
Meanwhile, engineering and permitting work continues on the 24-inch pipeline, which is being designed to deliver 500,000 Mcf/d of gas to interior and southern Alaska. About 260,000 Mcf/d would be sufficient to supply in-state needs for power generation and space heating in Alaska's interior and southcentral communities, mainly the cities of Fairbanks and Anchorage, Fauske said. The remaining 240,000 Mcf/d of capacity would be available for industrial use in the state, he said.
The state has appropriated $54.4 million for the project through the current state fiscal year and put $200 million into a special fund to pay for the work needed to get the project through an open season. Costs to build the project were estimated at $7.52 billion in 2011.
However, in the 2012 legislative session, lawmakers did not pass a bill that would have allowed AGDC to access the $200 million, Fauske said. Discussions between the state corporation and TransCanada and the producers have also been hampered over restrictions on the state corporation's ability to keep certain data confidential, Fauske said.
The bill legislators failed to pass would have given AGDC authority to retain confidentiality on information obtained from the TransCanada group. AGDC spokeswoman Leslye Langla said the work underway this year includes geotechnical work related to compliance with US Department of Transportation pipeline regulations and in procurement of engineering services for a gas conditioning plant at Prudhoe Bay.
A request for proposals is now being prepared by AGDC for a contract on engineering services for the conditioning plant, Langla said.
