Two pipelines make sense, Foothills says

WHITEHORSE, Yukon (AP) -- It would be cheaper to build two separate pipelines to ship natural gas south from the North Slope and from the Mackenzie Delta in Canada than a single line that includes a Beaufort Sea link, says a study by Foothills Pipe Lines Ltd.

Foothills holds permits to build and operate a pipeline from the North Slope to the Lower 48 along the Alaska Highway route favored by Alaska Gov. Tony Knowles.

Constructing a stand-alone pipeline along that route from Prudhoe Bay to Alberta, as well as a stand-alone line down the Mackenzie Valley, would cost an estimated $12.8 billion, says the study released this week.

The cost of building a single ''over-the-top'' line from Prudhoe Bay to the Mackenzie Delta, and then down the Mackenzie Valley, would cost more -- an estimated $13 billion, according to the study. The company says its workers spent 50,000 hours on the study over the last year.

One reason for the higher cost for the northern route is Foothills' conclusion that the 300-mile line under the Beaufort Sea would have to be two pipes, not just one, due to the need to provide for a reliable flow during the substantial parts of the year when the line can't be reached for repairs.

The report also says the pipe would have to be larger, and thus more expensive, because compressor stations couldn't be built along the undersea portion.

Brian Love, Foothills' manager of northern affairs in Whitehorse, told the Whitehorse Star that while the company is just now making its findings public, it has already met directly with industry and government in both Canada and United States to share its conclusions.

''This was a big undertaking,'' Love said. ''Remember, we have done the preliminary engineering work for the Alaska Highway project dating back to the 70s.

''We have been at this a long time. What this was, was taking existing information and then adding in things that have changed from a cost point of view ... and then adding in over-the-top,'' said Love.

The Foothills study estimates an Alaska Highway pipeline could be ready to ship gas south in six to seven years, with actual construction taking just 24 months, while it would take eight or nine years to start up the stand-alone Mackenzie Valley line.

The entire ''over the top'' line from Prudhoe Bay to Alberta wouldn't be finished for nine to 10 years, the Foothills study indicates. It says the short window for laying pipe in the Beaufort Sea means that expensive custom machinery would have to be built and would lay idle except for the 40- to 60-day window when work could be done in the Beaufort. And the longer construction time would result in increased interest costs.

The gas owners' group researching the pipeline options has said it will cost $15 billion to $20 billion for a single line along either route, though Foothills and the gas owners don't necessarily include the same facilities in their estimates.

The gas owners say their $100 million feasibility study will be completed by the end of the year. But with natural gas prices back down near $2 per thousand cubic feet, the owners have said that neither route looks promising at this point.