Alaska gas pipeline to Asia could be feasible

Mar 12, 1997 01:00 AM

Mar. 1, 1997 A huge pipeline project to deliver Alaska North Slope natural gas to Asian markets could be viable if construction costs are reduced from the current $ 15 bn estimate and developers get some tax breaks, according to a study. Most estimates put the probable gasline start-up date at about 2005. "Alaska's estimated 35 tcf of North Slope gas is marketable," the study says. "The long-discussed Alaska natural gas pipeline project is feasible." For decades, Alaska governors and other state officials have sought to develop the North Slope's gas reserves to supplant dwindling oil production. However, the need to build a new pipeline -- most likely to parallel the current trans-Alaska oil line -- has made the cost of delivering the gas prohibitive. Among the natural gas projects being planned around the world, the Alaska project would be the biggest, providing 14.5 mmt of gas a year, according to the study. That far exceeds the scope of the Natuna I project in Indonesia, forecast to provide 7 mmt a year.
Major owners of Alaska's North Slope gas are Exxon, Arco and British Petroleum, the main leaseholders on North Slope oil fields. The state has a royalty interest in the gas, generally 12.5 %.An official said legislation to provide state tax incentives to make the project more competitive is under consideration. The project would also get a boost from federal tax changes, including new depreciation schedules and advance tax credits, he said.

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