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Alaska Pipeline Project to go West to LNG Markets

BP, ExxonMobil and ConocoPhillips re-think APP in the light of the Shale Gas develoment

The Alaska Pipeline Project (APP) is a joint initiative between TransCanada and ExxonMobil that seeks to build and operate a pipeline system to transport Alaska’s North Slope natural gas resources to markets.

TransCanada and ExxonMobil began working together in 2009. Originally, APP was designed to connect Alaska’s North Slope natural gas resources to Canada and the US Lower 48 states with a reliable and secure source of clean energy for decades to come.

The project, under the Alaska Gasline Inducement Act, is the only project licensed by the State of Alaska to develop a pipeline to bring North Slope natural gas to market.

The project used the compiled study data as the basis for detailed draft Resource Reports required by the U.S. Federal Energy Regulatory Commission (FERC).

Since 2009, the Alaska Pipeline Project has conducted multiple engineering and feasibility studies to assist planners with the design of the project’s gas transmission pipelines and the gas treatment plant.

The project has advanced its assessment of the best materials and practices for building a large diameter natural gas pipeline in Alaska, including materials engineering and strain-based design.

The producing companies (ExxonMobil, ConocoPhillips and BP) support meaningful Alaska tax reform, such as the legislation introduced by Governor Parnell, which will encourage increased capital expenditure and establish an economic foundation for further commercialization of North Slope resources.

In March 2012 APP and the major Alaska North Slope gas Producers (ExxonMobil, ConocoPhillips and BP) agreed on:

 – A work plan aimed at commercializing North Slope natural gas resources within an Alaska Gasline Inducement Act (AGIA) framework

 – To work together on the next generation of resource development in Alaska.

In doing so they recognize that the global gas market is evolving rapidly with USA becoming a net gas exporter from the booming shale gas exploration & production.

Thus the four companies are evaluating options for a large-scale liquefied natural gas (LNG) export facility from Valdez in south-central Alaska as an alternative to a natural gas pipeline through Alberta.

From Valdez, the LNG could be exported to the LNG markets in Asia where the prices, based on long term JCC contracts, remain very attractive to commercialize the North Slope natural gas resources.

On May 2nd, the Alaska Natural Resources and Revenue Commissioners approved the request from APP stakeholders to modify the original 2700 km designed route from the North Slope top the US Lower 48 states

The new route would stay in Alaska state to carry on the natural gas from the North Slope to the Valdez tidewater area where it should be liquefied and exported.

This alternative route from the North Slope to Valdez would reduce the length of the gas pipeline to 1200 km and capital expenditure to $20 – 26 billion instead of previous estimated $32 to 41 billion 

According the Commissioners clearance for modification, TransCanada shall have to complete the alternative route to the LNG solution by September 2012. 

With ExxonMobil Point Thomson legal issues now settled, the producers are moving forward with the initial development phase of the Point Thomson project.

Alaska’s North Slope holds more than 35 trillion cubic feet of discovered natural gas, and Point Thomson is a strategic investment to position Alaska gas commercialization.

 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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