Backbone studies gas line options, offers comparative analysis

PHOTO/Rob Stapleton/AJOC
The citizens group, Backbone: Standing Up For Alaska’s Future, studied at least 15 variations of potential projects for developing the vast quantities of natural gas on Alaska’s North Slope. The Slope has estimated known gas reserves of 35 trillion cubic feet and another 65 trillion cubic feet of gas reserves yet to be discovered.

Backbone released "Alaska’s Gas, Alaska’s Future," a 130-page study, Jan. 25 that examines various gas pipeline proposals now being considered by Alaska gas producers, state lawmakers and others.

Backbone said long-term supply, demand and pricing forecasts for both the Lower 48 and Asia are critical to Alaska’s decision on the right gas commercialization project.

The study was conducted by Backbone members with the help of industry and legal experts. It examines the history of gas pipeline proposals in Alaska, dating back to the early 1970s and culled research, opinion and literature to develop a unbiased basis for comparing all of the gas line proposals.

Backbone and the study’s authors stopped short of endorsing a single project, but developed a comparative analysis of each proposal that has been discussed so far. "Before we turn one shovel on the wrong project, we need to get all the information we can on the right project," said Christy McGraw, Backbone’s director.

Such variables as market price, cost of service and wellhead netback were evaluated within a common framework. However, the outcome reflects estimates because of all the unknowns, including the effect that decisions the Canadians make could have on the projects.

The analysis included six variations of a tidewater liquefied natural gas project involving different quantities of gas being marketed annually; three variations of an Alaska-Canada Highway project; and the so-called "over the top" proposal that would ship North Slope gas offshore across the Beaufort Sea to Canada’s Mackenzie Delta and then south to market.

The analysis also examined the benefits of a Y-line project, combining a tidewater LNG project with a 4 billion cubic-feet-per-day or a 3 Bcf/d Alaska Highway pipeline project.

02/10/2001 - 8:00pm