BP and ConocoPhillips are to start building a gas pipeline in Alaska that will move approximately four billion cubic feet of natural gas per day. It will be the largest private sector construction project ever built in North America.
The two companies plan to spend $600m to reach the first major project milestone, an open season, commencing before the end of 2010.
Following a successful open season, a process during which the pipeline company seeks customers to make long-term firm transportation commitments to the project, the companies intend to obtain Federal Energy Regulatory Commission (FERC) and National Energy Board (NEB) certification and move forward with project construction.
The FERC and NEB certificates are the critical permits that provide government authorisation to construct a pipeline.
‘This project will allow us to keep our North Slope fields in production for another 50 years,’ said Tony Hayward, BP group chief executive.
The project consists of a gas treatment plant on Alaska’s North Slope and a large-diameter pipeline that will travels over 700 miles through Alaska, and then into Canada through the Yukon Territory and British Columbia to Alberta.
Should it be required to transport gas from Alberta, the project will also include a large diameter pipeline from Alberta to the lower 48 states.
BP and ConocoPhillips will also seek other equity partners, including pipeline companies, who can add value to the project and help manage the risks involved.
The companies have assigned staff to the joint project team which will be ramping up over the coming months. A new project headquarters in Anchorage will be identified and a new company formed to manage the project.