| ANCHORAGE, Alaska
ANCHORAGE, Alaska Aug 9 A pipeline bringing
natural gas from Alaska's North Slope to the populated region
in the southern part of the state would cost $5.7 billion to
$11.8 billion to build and would likely require state subsidies
or at least partial state ownership, members of a task force
told state legislators on Monday.
The "Alaska Stand Alone Pipeline Project" would comprise a
737-mile (1,186-km), 24-inch (61 cm) diameter pipeline
delivering up to 500 million cubic feet of natural gas from
Prudhoe Bay to the Anchorage region.
Lawmakers established the task force to study the
feasibility of such an in-state project as a backup to the
long-desired natural gas export pipeline that would deliver 4.5
billion cubic feet a day from Prudhoe Bay on the North Slope to
major North American markets.
The major export line has been proposed for three decades,
since before the Prudhoe Bay field began pumping oil in 1977.
Currently, two groups are proposing to build and operate major
export pipelines, and are competing for customer commitments
and government licenses.
TransCanada Corp (TRP.TO) and Exxon Mobil Corp (XOM.N) are
proposing a 1,700-mile (2,736 kilometer) pipeline from the North
Slope to Alberta that would cost $32 billion to $41 billion to
build. A joint venture formed by BP (BP.L) and ConocoPhillips
(COP.N), called Denali, proposes a similar pipeline that the
companies say would cost $35 billion to build.
Even if one of those competing groups is successful in
building a huge export line and starting operations in 2020, as
they envision, Alaska's population centers will likely need new
natural gas supplies before then, Dan Fauske, chairman of the
team studying in-state pipeline options, told lawmakers at a
hearing in Anchorage Monday.
"The big pipeline is everyone's goal. But it's 10 years
away," he said.
With the construction cost so high and the market
relatively small and isolated, it is likely that the state
government would have to pay for at least part of the project,
"I have a view that there will need to be some kind of
equity (investment) or subsidy for construction," Fauske said.
The in-state pipeline team is trying to entice potential
industrial users to make a pipeline more economically feasible,
he said. "We are open to all ideas and are exploring as many as
is fiscally possible," he said.
(Reporting by Yereth Rosen; Editing by Bill Rigby, Phil