In-state Alaska natural gas pipeline costs soar

By Phaedra Friend Troy

A special task force told state legislators that the Alaska Stand Alone Pipeline Project may cost nearly $12 billion to build, reported Reuters.

In a report to the Alaska legislature, the task force revealed that costs to construct the in-state pipeline will most likely range from $5.7 billion to $11.8 billion. The soaring construction costs will likely necessitate state subsidies or a partial state ownership in the pipeline, continued the Reuters report. 

Supplying natural gas and potentially natural gas liquids to the Anchorage area, the pipeline would also have off-take points along the route, such as Fairbanks.

The state of Alaska is proposing to build a 24-inch-diameter high-pressure natural gas pipeline from the hydrocarbon-rich North Slope to Tidewater at Cook Inlet. Traversing 737 miles, the Alaska Stand Alone Pipeline would be able to deliver 500 million cubic feet of natural gas a day.

Natural gas would be supplied by either or both the Prudhoe Bay Central Gas Facility and the Gubik field in the Brooks Range. Potential routes are still under examination.

According to Reuters, the in-state line is a stand-in for a long-awaited, more-desired natural gas export pipeline that would carry 4.5 billion cubic feet a day from Prudhoe Bay to North American markets.

Currently, there are two natural gas export pipelines in the works. BP and ConocoPhillips are working on the Denali line, which is estimated to cost $35 billion; while TransCanada and ExxonMobil are studying the Alaska Pipeline Project, which is expected to cost up to $41 billion. Both pipelines have conducted open seasons to determine customers and commerciality.

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