Safety, Shale, Midstream Construction Discussed At Pipeline Opportunities Conference

By Rita Tubb, Managing Editor | July 2011, Vol. 66 No. 7

Hoffmann used the two accompanying slides to illustrate incremental infrastructure additions and related costs.

Following are projected midstream infrastructure developments and expenditures through 2035 from the forthcoming report:
• Approximately 50 Bcf/d of new transmission capability;
• Approximately 1,400 miles per year of new mainline capacity;
• Approximately 500 miles per year of new laterals to/from power plants, processing facilities and storage fields;
• Approximately 14,000 miles per year of new gathering lines;
• Just over 1 Bcf/yr of new processing capability;
• Almost 25 Bcf/yr of new working gas capacity; and
• About 120,000 hp/yr for pipeline compression.

As to costs, the expenditures for the incremental infrastructure projected are significant:
• Over $250 billion or about $10 billion per year of total capital expenditures are required over the next 25 years;
• Half of this amount, or $125 billion, is required for new or expanded mainline capacity;
• $1.5 billion per year for laterals;
• $2 billion per year for gathering lines; and
• $1billion per year for processing plants.

Pipeline compression and storage fields account for the remainder of the capital requirement.

Alaska Pipeline
In the Alaska Natural Gas Pipeline session, Larry Persily, federal coordinator, Alaska Natural Gas Transportation Projects, provided an overview of the TransCanada-ExxonMobil proposal to construct the 1,715-mile Alaska Natural Gas Pipeline* from the North Slope gas fields down the Alaska Highway to an existing pipeline network in Alberta, Canada.

Persily pointed out that although TransCanada-ExxonMobil held an open season last year, no information had been released on any bids received. He noted that the planned project is not your typical pipeline. “Although lots of miles of pipe have been built and are being built throughout North America, this would be the largest,” he said. “It would be 48 inches in diameter, with one-inch thick walls and more than 1,700 miles long.”

As to the latest timeline, Persily said if everything goes well, the first gas could flow in late 2020. This timeline is based on construction starting in 2016.

“Even if we’re a little skeptical about the economics,” he said, “it is possible.”

Following next was Wood Mackenzie’s Edward Kelly, vice president, North American Gas and Power, who discussed market conditions as they are today and what they are predicted to be in the 2020-2030 timeframe when the Alaska Natural Gas Pipeline is scheduled to be completed.