ANCHORAGE (AP) -- Williams Gas Pipeline Co. is looking into whether petrochemicals could boost the financial attractiveness of building a natural gas pipeline from Alaska's North Slope.
Williams, based in Tulsa, is doing a study on liquid extraction that should be completed within the year, Cuba Wadlington Jr., CEO of Williams Gas Pipeline, said Thursday in a speech to the state's Alaska Highway Natural Gas Policy Council. The pipeline company is a subsidiary of The Williams Cos. Inc., which operates a refinery in North Pole and a chain of service stations in Alaska.
Liquids will have to be extracted at some point during the transport of natural gas to the Lower 48, Wadlington said. The question is whether that will be done on the North Slope, in Fairbanks or in Canada, he said.
The sale of petrochemicals would increase the economic viability of a natural gas pipeline, Ed Small, Calgary representative of Cambridge Energy Research Associates, told the council. Natural gas components used to make petrochemicals include ethane, propane and butane.
Small said there are three scenarios: an extraction plant could be built in Alaska, requiring a separate pipeline to move the liquids; existing infrastructure in Alberta, Canada, could be used; or the liquids could be shipped to Chicago and extracted there.
While economically unattractive to Alaskans, Small said the Alberta option makes the most sense. Building an extraction plant at the North Slope and a separate pipeline could add $3 billion to $4 billion to the cost of building a natural gas pipeline, and perhaps would place another hurdle in what already is a complicated process of getting a pipeline built.
Natural gas will have to sell for at least $3 per million BTUs to make a natural gas pipeline economically competitive, Small said. While prices should remain at $3 or above through 2005, companies can expect pressure on several fronts once the pipeline is built, perhaps coming on line in early 2008, he said.
Building the line will increase supply, therefore driving prices down, Small said. In addition, six to seven new liquid natural gas facilities currently are being proposed, and clean coal is showing market growth.
The council, created by Gov. Tony Knowles in January, met for the fourth time Thursday. Arco Alaska Vice President Frank Brown and former Fairbanks North Star Borough Mayor Jim Sampson are co-chairmen.
Three more sessions are scheduled this year, with a final meeting scheduled for Nov. 8. Public hearings also are scheduled.
© 2017. All Rights Reserved. | Contact Us