Heinze stumps for all-Alaska route in Kenai

Posted: Thursday, March 22, 2007

As long as folks cannot agree on “the big project” to bring North Slope gas to market, the Alaska Natural Gas Development Authority will be pushing for “the little project,” the group’s top executive told Kenai business leaders Wednesday.

Addressing a packed meeting of about 75 Kenai Chamber of Commerce members and guests, ANGDA Chief Executive Officer Harold Heinze pitched ANGDA’s Alaska Gas Market System, which he said would make the state’s natural gas resources available to Alaskans.

Realistically, Heinze said that means residential users in Anchorage and on the Kenai Peninsula as well as large industrial users north of Kenai.

No one at the Kenai luncheon meeting expressed opposition.

Heinze said, of all the major gas producers and large pipeline companies discussing bringing huge gas reserves from the North Slope to market, “We don’t see a lot of people wanting to get gas to us here in Alaska.

“ANGDA is doing whatever it takes to make that connection happen,” he said.

The ANGDA proposal, according to Heinze, would build a 24-inch buried pipeline from Prudhoe Bay to Glenallen, a 20-inch line to Valdez and a 16-inch line to Cook Inlet.

He said the cost of building the line to Cook Inlet would be greater than what residential users would want to bear. Industrial users would need to be included.

“ConocoPhillips and Agrium are not committed at this point,” Heinze said. The two large industrial users say they would possibly be interested in the future, he said.

Target markets for the AGMS, according to Heinze, start with gas for heating homes and for making electricity. The second market area would be delivering propane to coastal, river and highway communities. Liquefied natural gas would be shipped from Valdez for export to Pacific Rim re-gasification facilities, and the fourth market target would be Cook Inlet industrial and petrochemical plants in the form of feedstocks.

“All four are key to our project,” Heinze said.

He said critics of the ANGDA project have protested the fact that it uses one-fifth of the North Slope gas of the big project.

“I say, ‘Do the big project.’ If one-fifth is going to hurt the big project, you didn’t have a very good project in the first place,” Heinze said.

He predicted that as soon as gas exploration companies on the North Slope see a project beginning, they will go out and drill. He said it would not be the BP or ConocoPhillips companies; it would be Chevron, Anadarko and Frontier.

If ANGDA’s gas market system is approved, Heinze said there would be a three-year construction period, with the first delivery of gas in six years.

He said with .25 billion cubic feet per day of gas going to Alaska, the cost of building the line is too big, but if modest industrial users -- whether on the Kenai Peninsula or at Valdez -- are added, it would take the total to 1 billion cubic feet per day.

“That makes it more (economically) attractive,” Heinze said.

Heinze said the big pipeline project starts at 4 1/2 billion cubic feet per day and expands to 6 billion. The pipeline would be a 52-inch line.

When asked if the ANGDA line could be considered along with the big line, rather than an either-or ultimatum, Heinze said “If people make commitments for the big pipeline, I’m going to be standing there at Delta Junction saying, ‘I’m over here.’” His push then would be for a spur line to Cook Inlet off the big pipeline.

“What we’re doing is compatible with any proposal,” he said.

A Senate bill to fund the AGMS was introduced by Sen. Tom Wagoner on Monday.

Phil Hermanek can be reached at phillip.hermanek@peninsulaclarion.com.

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