Pipeline backers say Fairbanks needs gas

Posted: Thursday, July 20, 2000

ANCHORAGE (AP) -- Backers of a proposed gas pipeline from Prudhoe Bay through Canada said Wednesday they realize they must get some gas to Fairbanks to get political support from Alaskans for their project.

The proposal would route the pipeline off the Arctic coast then up the Mackenzie River, picking up gas from Canadian fields along the way. Ultimately, the gas would be used in the Lower 48.

Houston, Texas-based Arctic Resources Co. is champion of the project.

Executives were in Anchorage on Tuesday and Wednesday to discuss their idea with state officials, oil companies, Native corporation officers, the news media and others. The cost of the project is pegged at $5.3 billion.

This proposal surfaced last year amid rising natural gas prices in the Lower 48 and has gained some momentum since. Gas has been produced with oil from Prudhoe since 1977. But most is injected back underground because there's no way to get it to market.

Alaskans have long supported projects that would route a pipeline partly or entirely through the heart of the state. That would give more Alaskans construction jobs and a steady, ample supply of natural gas for in-state use.

Besides the pipeline through Canada, competing ideas for the gas would route a liquefied natural gas project to Valdez or Kenai for export to Asia, or convert the Slope's gas into a refined liquid that could flow through the current 800-mile oil pipeline to Valdez.

Forrest E. Hoglund, chief executive of Arctic Resources, said Wednesday his firm has become very sensitive to Alaska's interest in getting some North Slope gas to consumers in Fairbanks and elsewhere in the state.

''Fairbanks will be part of the solution'' for getting the go-ahead for his project, he said.

Among the ideas under consideration is shipping propane to Fairbanks, then possibly building a separate gas pipeline to the Interior city. After that, Alaskans could figure out how to get the gas to the more populous Anchorage, he said.

Robert Murphy, president of Arctic Resources, said his company wants to assemble a consortium of U.S. and Canadian oil companies, pipeline operators, utilities and Native groups that would oversee construction of its pipeline.

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