Sunday, January 31, 2010

APP Open Season Details

I've had some time to scan through the "APP" (Alaska Pipeline Project) open season documents and here are a few first impressions:

  • In Service Date: 2020 - Hey I'll be SIXTY! OMG I'll be SIXTY!
  • Cost to move gas to Alberta: $2.43-$3.13/MMBTU
  • Cost to move gas to Valdez: $2.22-$2.89/MMBTU
  • Point Thomson is a vital part of the overall project
Overall I'm encouraged by the numbers - it actually looks achievable. At a minimum the cards are on the table and other parties can start ciphering on the cost of an LNG plant, the value of Alaska Gas for tar sand production, and a reasonable tax structure.

Anybody want to take a stab at the cost of the LNG plant? My quick calculation say the LNG plant would have a capacity of 18 million tons per year LNG and cost $31 Billion. Somebody check my math. We really need a good cost estimate of the LNG plant to compare the options.

Here's some images from the document showing the pipeline options and capacities:

Assorted headlines:

EDMONTON JOURNAL:Alaska gas could bypass Alberta Option would send fuel to Valdez

UPI TransCanada details Alaskan pipeline plan

GLOBE AND MAIL: TransCanada seeks Alaska project commitments

OIL & GAS JOURNAL: Alaska Pipeline Project files open season plan

REUTERS: Exxon, TransCanada raise Alaska pipeline estimates


Dave said...

Using Kitimat as a benchmark, the cost of constructing an LNG facility is upwards of $3 billion.

That being said, if the facility is built, the one variable that needs to be included is the revenue potential that Asian markets could bring. Being able to estimate that could make the LNG route a more economic option for Arctic natgas.

AK Engineer said...

Thanks Dave;

That's the nice thing about LNG - it can go where the market pays the most. I assume it will sell at a premium to lower 48 shale gas.