The State of Alaska has been exploring some four natural gasline options, as detailed in Green Markets last week (GM July 7, p. 14). However, Governor Sarah Palin’s announcement July 7 about a new public/private gasline venture for an in-state gasline was a surprise, according to Agrium Inc. spokesperson Lisa Parker.
Rather than bringing gas into Agrium’s idled Kenai nitrogen plant, the Palin proposal would take gas from the region to customers in the interior and southcentral part of the state. Parker said Agrium has been willing to pay a good price for Cook Inlet gas, but producers have said gas supplies were depleted and there were no new discoveries to keep the Agrium plant in operation.
Now, the newly proposed gasline envisages new discoveries in Cook Inlet. Conceivably, if new discoveries are indeed forthcoming, some of that could stay in Cook Inlet for Agrium.
Why are discoveries more likely with a pipeline and not before? The state says that Cook Inlet gas is stranded similar to that in the state’s North Slope. It says this significant resource potential is stifled by the relatively small potential for market expansion. This gasline will link the Cook Inlet gas to an expanding market and will create incentives for explorers to invest in finding more gas in Cook Inlet.
Construction of the gasline would start in the south and progress north. The first phase would leave Cook Inlet and reach Fairbanks and Interior Alaska by 2013. Over the next five years, the state hopes to see discoveries in both Cook Inlet and along the in-state pipeline corridor. If not, the project’s second phase could continue building the line north to access gas supplies in the North Slope or beyond, making them available to interior and southcentral Alaska by 2014. If phase two is not needed, the in-state line could be connected to the main North Slope line when it is completed around 2018-2020.
Therefore, if significant gas is not found in Cook Inlet, phase two could bring gas down from the North Slope. Parker held out the possibility the new pipeline could wind up being a north-south pipeline, eventually piping gas back down to the Cook Inlet.
The state said the goal is to roll out the recommended structure and more details this fall, then seek any necessary enabling legislation and/or appropriations during the next legislative session in January 2009.
The public/private partnership to build the gasline includes the Alaska Natural Gas Development Authority (ANGDA), ENSTAR Natural Gas Co., and the State of Alaska.