2 northern gas routes 'a pipe dream' Politicians pushing for development in Alaska and Canada

Chris Varcoe Calgary Herald; Southam Newspapers

There's no way two multibillion-dollar pipelines to the Arctic can be built at the same time given the massive amount of staff and equipment required, a pipeline conference heard Monday.

The race to build a natural gas pipeline to the North has captured the attention of Canada's oilpatch with two competing proposals emerging in the past year.

One line would run from Alaska through the Yukon into northern Alberta, while a separate proposal would connect the N.W.T.'s Mackenzie Delta to Alberta.

Yukon Premier Pat Duncan and Northwest Territories Premier Stephen Kafkwi said this month that they support both developments being built, but Wayne Sartore of pipeline giant Enbridge Inc. said Monday that simply won't happen at the same time.

"From a politician's perspective, I think that's a pretty good answer ... (but) we being in pipelines, we don't think it can be done," said Sartore, vice-president of northern pipeline development for Calgary-based Enbridge, which operates the country's northern oil line that runs to Norman Wells, N.W.T.

"We don't think it can be done just because of capacity -- human capacity and equipment capacity. These are big, big projects."

Speaking at the two-day North American Pipelines Conference, Sartore said petroleum producers will ultimately decide which route is chosen, not politicians or pipeline operators.

Earlier this month, Kafkwi called on Ottawa to block construction of a gas pipeline from Alaska if a pipeline from the Mackenzie Delta isn't built. Alaskan governor Tony Knowles and Yukon Premier Pat Duncan both support the so-called Alaska Highway route but said the market could support construction of both pipelines.

But building even one line from the North will require massive amounts of equipment and staff to complete, given the long distance to market and technical difficulties of laying pipe in the permafrost.

Trying to build two pipelines at the same time is an impossibility, Sartore said.

"As pipeline constructors, you just physically can't do it. There just isn't enough equipment and people to do that," he added. "They physically can't be built in the same two- to three-year window."

The race to bring northern gas to the lower 48 states has gained speed due to rising gas prices and the untapped reserves found in the Arctic.

Natural gas prices have soared to record heights in the past year, with Alberta spot prices closing Monday at $7.27 per gigajoule, up 24 cents.

Alaska's North Slope contains proven reserves of 31.2 trillion cubic feet (tcf) of gas with an estimated 68 tcf of gas still waiting to be found, while the Mackenzie Delta-Beaufort Sea region holds an estimated 64 tcf of gas.

Energy analyst John Mawdsley of FirstEnergy Capital Corp. said the North American marketplace will eventually require gas from Alaska and the Mackenzie Delta to meet consumers' needs.

However, Mawdsley said it's likely that the Alaskan project, which he pegged at about $8 billion to build, will get off the ground first, followed by the N.W.T. venture, which is estimated to cost $3.5 billion.

http://www.edmontonjournal.com/business1/stories/010320/5034518.html

-- Martin Thompson (mthom1927@aol.com), March 20, 2001