will be re-injected, reducing greenhouse gas emissions. The plant will also compress the gas and chill it to prevent thawing of permafrost near the pipeline. The gas treatment plant will be the largest of its kind in the world.
Millions of tons of steel will be used to build a large diameter pipeline that will transport the gas. The pipeline will be coated to protect it from corrosion and buried underground. A number of other features will be incorporated into the design to insure safe and environmentally sound operations.
The construction and operation of the Denali pipeline will lead to the creation of a multitude of jobs and business opportunities. With the market access Denali will provide, it will also help form the economic basis for gas exploration in hydrocarbon prone regions along the pipeline’s route. New revenue from royalties, taxes and the creation of new jobs and businesses will have a long term, positive impact on the economies of Alaska and Canada.
The Denali team has completed a comprehensive and successful 2008 work program. Focusing on the area between Delta Junction and the Alaska-Canada border, Denali surveyed over 200 miles of wetlands, investigated 70 archeological sites, shot over 1,700 miles of ortho-photography, shot 730 miles of immersive video, investigated 538 potential stream/river crossings, performed route reconnaissance, opened a field office in Tok, employed as many as 80 people in the field, and began its stakeholder engagement efforts in Alaska and Canada. Denali also progressed work in the areas of route optimization, cost estimates, scheduling and project execution planning; pre-filed with the Federal Energy Regulatory Commission (FERC); filed for a right of way in Alaska with the US Bureau of Land Management; and employed over 90 people in its project engineering and management efforts. Denali spent approximately $55 million in 2008.
The primary components of Denali’s 2009 work program consist of field work; performing preliminary engineering and updating cost estimates for the pipeline and gas treatment plant; continuing stakeholder engagement efforts in Canada and Alaska; and working with regulatory agencies. The 2009 program is focused on providing the support necessary to meet Denali’s first major milestone – a successful open season commencing in 2010. If the open season is successful, Denali will pursue approval by the FERC in the US and the National Energy Board (NEB) in Canada to construct the project. Construction can begin after regulatory approvals are received.
Denali will be formulating its tariff structure after updating its cost estimate for the project. However, there are a number of principles that Denali will be following as it develops its commercial terms. Specifically:
Denali will be an open access pipeline.•
Any party that has the financial capacity can commit to reserve space in the pipeline.
Rates will be distance sensitive.•
The fee charged to ship gas will be based upon the distance the gas is transported.
The project will provide for efficient expandability. •
The initial design will incorporate the ability to expand the capacity of the line through the installation of additional compression.
Denali plans to solicit customers for interest in expansion • of capacity every two years.
Following the initial successful open season, Denali will actively solicit interest in pipeline expansion every two years. Should there be demand for a capacity increase, Denali will secure the financial commitments from shippers to support the expansion and begin the process of increasing the pipeline’s capacity.
Flexibility to use existing or new infrastructure out of Canada.•
At the pipeline terminus in Alberta, Denali will provide shippers the flexibility to move their gas to market through the existing pipeline system, or, if required, through a new pipeline to the Lower 48 that Denali would build.
Rolled in rates. •
Denali will provide for rolled in rates for subsequent expansions consistent with applicable FERC regulations in the U.S. and National Energy Board (NEB) regulations in Canada."