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Alaska LNG: New details, new questions as field season opens

Pat Forgey

JUNEAU -- Exxon Mobil Corp. and its partners in the Alaska natural gas export pipeline began work on its summer field season this week, with Gov. Sean Parnell scheduled to sign Senate Bill 138 Thursday in Fairbanks to make Alaska officially one of those partners.

Exxon's Steve Butt, now reassigned to the AKLNG project, met Wednesday with the Alaska Gasline Development Corp., the state agency through which some of the state's interest in the project will be managed.

He told the AGDC board of directors that the information it has developed for the southern portion of its planned smaller pipeline would be a very useful complement to the information that the AKLNG project has already developed for its large line.

"You guys have a lot of great data south of Livengood," Butt said.

AGDC was created by the Legislature to bring natural gas to the Anchorage area when it was feared that Cook Inlet gas fields would soon be unable to meet Southcentral demand. The large line on which Exxon and pipeline company TransCanada were working was intended to follow the trans-Alaska pipeline system south to Livengood, then turn southeast across Canada toward U.S. Midwest markets.

With new shale gas production leaving those markets awash in cheap gas, Butt said shipping gas there now would be like "moving sand to the beach."

Those companies and new partners BP and ConocoPhillips have lots of the geologic and other data they need north of Livengood but precious little between there and Nikiski on the Kenai Peninsula, where an export port would be built.

"Once we get south of Livengood, we don't know it very well," Butt said

That's where the data that AGDC has already developed can be useful to the new joint project, he said.

They've drilled 1,200 geotechnical boreholes north of Livengood, he said, and plan to drill 100 south of Livengood this summer. Incorporating work that AGDC has already done can help keep costs down, a key part of making the project financially viable, according to Butt.

"We want to make sure we're not drilling the same holes twice," he said.

The studies this summer will include cultural and archeological assessments, as well as looking at fishery resources. Butt said while the partners are convinced they can build the $45 billion to $65 billion project without harming any resources, they need baseline data to be able to prove that to regulators.

This will be the biggest project developed since the passage of the National Environmental Policy Act, he said. That legislation, passed in 1970, requires environmental assessments and environmental impact statements for federal actions.

"We need to have a thorough understanding of the environment in which we will work so we can demonstrate conclusively that we have not adversely impacted it," he said.

Among the biggest decisions remaining to be made is how and where to cross Cook Inlet, Butt said.

They are now looking at four different ways to get across the inlet to Nikiski, he said, depending on whether the pipeline enters on the east or west side of the Susitna River. In fact, he said, it might not be necessary to cross the Susitna at all.

The current plan is to neither bore a tunnel nor dig an underwater trench for the 42-inch pipeline, he said. The Cook Inlet sediment is too soft to bore, and cutting a trench could have too much impact on the aquatic life.

"In the Inlet, you don't always trench," he said, but the final decision will be up to regulators.

Instead, they're now looking to use the benefit of that softness and simply lay the pipe along the bottom, saddled with weights to hold it down.

"The sediments are soft, and if you weight the line down properly, it will sink itself," he said.

Ice in Cook Inlet can be a hindrance for vessels, but it is not like Arctic ice that can present dangers to the pipeline, he said.

"The ice in the inlet is not, by Arctic standards, all that technically challenging," he said; it's not land-fast, it's not multiseason, and you don't have big pieces of hard glacial ice moving around.

And crossing the Susitna River might not even be necessary, Butt said, if the right route can be found.

"For the Susitna, we're probably going to have to put in a bridge, but we're looking at that one hard," he said.

In most places, unlike the TAPS oil pipeline, the gas line will be buried, he said.

The challenge now, according to Butt, is buying up property in Nikiski for the liquefaction plant that will convert the piped gas to liquid for overseas shipment. That plant will be the largest in the world, he said, although he declined to tell AGDC President Dan Fauske exactly how big. They're negotiating purchases with 130 individual property owners and don't want those owners to know just how much land they need because that might drive up prices.

"We're out there buying property now," Butt said.

Even with all the work going on, AKLNG is just the latest in a series of attempts to bring Alaska's huge reserves of North Slope natural gas to market. As described to the Legislature that passed Senate Bill 138, what's underway now is really a detailed study of costs and other factors before the companies and the state make a final investment decision. An operational pipeline is at least 10 years away, they were told.


By PAT FORGEY
pat@alaskadispatch.com