ANCHORAGE, Alaska, Feb 10 - The company seeking to build a massive natural gas pipeline on behalf of two of the main North Slope oil producers announced Tuesday that it has awarded a key contract for design of the project.
Denali-The Alaska Gas Pipeline LLC, a company formed by BP (BP.L) and ConocoPhillips (COP.N), has engaged Fluor WorleyParsons Arctic Solutions to design and evaluate the North Slope treatment plant that would be needed to process natural gas being fed into the planned natural gas pipeline.
Fluor WorleyParsons Arctic Solutions is a joint venture partly owned by Fluor Corp (FLR.N).
The contract covers initial design work, including technical studies, cost estimation, schedule development and other services, Denali officials said.
The Denali pipeline would deliver 4 billion cubic feet of natural gas daily from Alaska's North Slope to North American markets. The line, as currently envisioned, would run about 1,700 miles from Prudhoe Bay to an existing pipeline hub in Alberta, Canada. Past estimates have put the project cost at above $30 billion, but those estimates are currently under review.
The contract for preliminary design of the gas-treatment plant is a milestone in the decades-long efforts to build a North Slope natural gas pipeline, Denali officials said.
"It's another big step," said Dave MacDowell, a spokesman for the Denali group.
The gas-treatment plant would be the biggest in the world, MacDowell said. Past studies have pegged the cost at $5 billion to $6 billion, he said, "So it's a mega-project in its own right."
The North Slope holds known reserves of about 35 trillion cubic feet of natural gas, and experts believe that there is much more yet to be discovered. But despite three decades of plans for commercializing that natural gas, there has been no way to ship the reserves to markets.
The trans-Alaska oil pipeline has been shipping crude oil since 1977, but the known natural gas is considered technically and economically stranded from markets.
The Denali project is competing with a similar plan being pursued by Calgary-based TransCanada Corp TRP.T.
TransCanada, which contrasts with BP and ConocoPhilips because it does not produce North Slope oil and would not be a producer of North Slope gas, last year obtained an exclusive state license for the project.
The state license entitles TransCanada to state endorsement, up to $500 million in state subsidies and a pledge that the state will not negotiate with competing gas pipeline sponsors. But the state license does not preclude any other project from going forward or from receiving the federal permits that would ultimately be needed to build and operate a line.
Both the Denali and TransCanada projects envision a months-long open season, a period for soliciting shipping customers, to be held in 2010 and for gas deliveries to start as soon as 2018.
Denali-The Alaska Gas Pipeline LLC, a company formed by BP (BP.L) and ConocoPhillips (COP.N), has engaged Fluor WorleyParsons Arctic Solutions to design and evaluate the North Slope treatment plant that would be needed to process natural gas being fed into the planned natural gas pipeline.
Fluor WorleyParsons Arctic Solutions is a joint venture partly owned by Fluor Corp (FLR.N).
The contract covers initial design work, including technical studies, cost estimation, schedule development and other services, Denali officials said.
The Denali pipeline would deliver 4 billion cubic feet of natural gas daily from Alaska's North Slope to North American markets. The line, as currently envisioned, would run about 1,700 miles from Prudhoe Bay to an existing pipeline hub in Alberta, Canada. Past estimates have put the project cost at above $30 billion, but those estimates are currently under review.
The contract for preliminary design of the gas-treatment plant is a milestone in the decades-long efforts to build a North Slope natural gas pipeline, Denali officials said.
"It's another big step," said Dave MacDowell, a spokesman for the Denali group.
The gas-treatment plant would be the biggest in the world, MacDowell said. Past studies have pegged the cost at $5 billion to $6 billion, he said, "So it's a mega-project in its own right."
The North Slope holds known reserves of about 35 trillion cubic feet of natural gas, and experts believe that there is much more yet to be discovered. But despite three decades of plans for commercializing that natural gas, there has been no way to ship the reserves to markets.
The trans-Alaska oil pipeline has been shipping crude oil since 1977, but the known natural gas is considered technically and economically stranded from markets.
The Denali project is competing with a similar plan being pursued by Calgary-based TransCanada Corp TRP.T.
TransCanada, which contrasts with BP and ConocoPhilips because it does not produce North Slope oil and would not be a producer of North Slope gas, last year obtained an exclusive state license for the project.
The state license entitles TransCanada to state endorsement, up to $500 million in state subsidies and a pledge that the state will not negotiate with competing gas pipeline sponsors. But the state license does not preclude any other project from going forward or from receiving the federal permits that would ultimately be needed to build and operate a line.
Both the Denali and TransCanada projects envision a months-long open season, a period for soliciting shipping customers, to be held in 2010 and for gas deliveries to start as soon as 2018.
