ANCHORAGE, Alaska (AP) — In a story Dec. 20 about a proposed in-state natural gas pipeline, The Associated Press reported erroneously that a pipeline previously under consideration by the Alaska Gasline Development Corp. would have been pressurized to 25,000 pounds per square inch. The correct figure was 2,500 pounds per square inch.
A corrected version of the story is below:
In-state gas pipeline planners revise project
In-state natural gas pipeline planners revise project; remove gas liquids to lower tariffs
By DAN JOLING
ANCHORAGE, Alaska (AP) — A proposal for an in-state natural pipeline that could carry North Slope natural gas to communities from Fairbanks to southcentral Alaska has been revised to eliminate the transport of natural gas liquids, which will have the effect of lowering tariffs for customers in Fairbanks.
Carrying natural gas liquids such as ethane, propane and butane was previously considered desirable because they could be sold at a premium and used to lower the price of gas to Alaskans, said Frank Richards, the pipeline engineering manager for the Alaska Gasline Development Corp.
"Now we see that the world is awash in natural gas liquids," he said in a presentation to a legislative committee Thursday.
More shale gas has meant a glut of NGLs in the U.S. market, with prices falling by 60 percent.
Eliminating them from an in-state pipeline would allow the project to be built with industry-standard 36-inch pipe rather than 25-inch pipe, Richards said. Pressure could be lowered from 2,500 pound per square inch, which requires premium fittings, pipe and valves, to 1,480 pounds per square inch. Lower pressure means a safer line and more takeout points, Richards said.
NGLs in the line would have required Fairbanks to have facilities to take them out, depressurize gas for local use and re-inject the liquids. Another extraction plant would have been needed at the end of the 737-mile line.
"Those are expensive facilities," Richard said.
The new plan eliminates that and the net effect would be to lower the tariff for natural gas delivered to Fairbanks, which under the previous design would have paid a higher tariff than Anchorage. Fairbanks, he said would pay $8.25 to $10 per million BTUs, down from $10.45 under the old plan and far less than the $23 per million BTUs that customers are now paying for fuel oil. Anchorage would pay $9 to $11.25 per million, comparable to rates projected for 2013, he said.