overview & status
DESCRIPTION
Overview & Status. July 18, 2001. Outline. Brief Overview Current Activity / Progress Government Engagement Issues Forward Plan. Joint Team Objectives. Assess the economic viability of the project Focus on route evaluation Cost and environmental considerations - PowerPoint PPT PresentationTRANSCRIPT
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Overview & Status
July 18, 2001
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Outline
• Brief Overview
• Current Activity / Progress
• Government Engagement Issues
• Forward Plan
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Joint Team Objectives
• Assess the economic viability of the project
• Focus on route evaluation– Cost and environmental considerations
• Prepare sufficient information to support potential permit applications
Safe and Environmentally ResponsibleSafe and Environmentally Responsible
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Overall Project Scope
Alberta to MarketPipeline System (B-C) :New-Build and/or Expansion
The AlasCan Group
Land – Canada (2)Scott Land and LeaseProgress Land Services
Environmental / Regulatory – USField studies
URS
Land – US Lower 48
Wilbanks Resource Corporation
Environmental / Regulatory – CanadaField studies
AMEC Earth and Environmental
NGL Extraction Facility:Removal of C2+
Fluor Veco
Alaska to AlbertaPipeline System (A-B) :– Buried, High Pressure, Chilled Pipeline– Intermediate Compression– Block Valve Stations– Intermediate Pigging Facilities
Fluor Veco
Gas Treatment Facility (Prudhoe Bay) :Removal of Acid Gases - CO2, H2SCompress / Chill gas to P/L entry conditions
Natchiq Parsons
Land – US Alaska
American Reclamation Group
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The “Seven Lenses” of Evaluation
• Economics
• Environment
• Gas Access
• Jobs
• Revenues
• Safety
• Timing
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Current Activity / Progress
• Contractors On-Board (approx. 500)
• Technical / Regulatory Work Proceeding
• Defining Commercial Issues
• Ongoing Discussions with Interested Parties
– Hundreds of public/private meetings
• Engaging Governments & Communities
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Current Technical Studies
• Process Development– Acid Gas (CO2, H2S) Removal Technology– NGL Removal Processes
• Pipeline Hydraulic Simulations (Over 1,000 Cases)
– Pressure (1,750-3,000 psi) vs Diameter (42”-56”)
– Comparisons of Compressor Drivers– Throughput and Expandability
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Compressor Stations vs. Throughput
System Optimization Plot Example
0
5
10
15
20
25
30
35
40
45
50
0 1 2 3 4 5 6 7
Nominal Volume BCFD
Com
pre
ssor
Sta
tion
s
44”48”52”56”
150 mile station spacing
75 mile station spacing
(@2500 psig)
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Current Technical Studies
• Materials– Feasibility of High Strength Steel
• Logistics– Port Surveys in Anchorage, Seward, Valdez and West Coast– Review of Potential Fabrication Site Locations– Trucking and Highway Analyses– GTP Sealift Analyses – Potentially Largest Ever
• Construction Technology– Directionally Drilled River Crossings– Trenching Technology– Construction Equipment Requirements & Availability
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Regulatory / Environmental & Land Activities
• Summer field work / center line studies
• Cultural resource surveys
• Land owner discussions
• Beaufort Sea survey
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Government Engagement
• Ongoing Discussions with Governments– US and Canadian Federal – State of Alaska– Canadian Provincial/Territorial/First Nations
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State Engagement Issues
• Initiate dialogue between Producers and State of Alaska regarding fiscal stability / certainty
• Objective is to have key terms understood prior to the January legislative session
• Key discussion items– Valuation clarity (severance and royalty)– Pipeline vs Producer issues– Pipeline Ad Valorem certainty– Gas take-in-kind and nomination process– Project risk and long-term certainty
June July Aug Sep Oct Nov Dec
Agree ground-rules
Working discussions
Draft valuation, AVTcontract terms
Agreed terms pre-session
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Simplification of State Royalty, Severance Valuation
• Common royalty and severance methodologies
• Transparent pricing
• Simplicity best way to minimize future concerns
• Wellhead price for royalty and severance linked to Lower 48 with transportation differential– Define market price– Agreement on gas valuation terms– Concurrence with FERC/NEB tariff terms– Processing fees
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Wrap-up
• We are fully engaged in a joint program to evaluate and progress a large, modern pipeline from Alaska to Canada and the lower 48 states
• There is a growing market for Alaskan gas, but we must be cost-competitive to be a viable project
• It is not yet clear that we can develop an economic project
• It is premature to preclude any options at this point
• Still targeting completion of engineering and route studies by year end