1. Comparison of Current
Alaska Gas Pipeline Proposals
WHITE PAPER
Prepared for:
Alaska Gasline Port Authority
January 2012

2. Comparison of Current
Alaska Gas Pipeline Proposals
WHITE PAPER
Prepared for:
Alaska Gasline Port Authority
PREPARED BY:
Juneau Anchorage
January 2012

3. Introduction & Methodology
Alaska’s abundant natural On and offshore
(tcf) !
those - -9 tcf). "
.#
electrical power
resently
$ %
additional sites in Cook Inlet and northern Alaska, i
il
company operations currently produce and re- /
Bay. & In the absence of a markets, t
to in-state, domestic, or international markets.
three blic.
of the proposals feature -diameter pipelines and the third proposes a small-
-diameter pipeline proposals are the All Alaska Gas Pipeline, proposed by the Alaska Gasline Port Authority
(AGPA), and the Alaska Pipeline Project,
-diameter pipeline project, known as
the “bullet line.”
mic and fiscal benefits to Alaska from each of these three
pipeline proposals. Information from publicl ed by project
proponents as well as other sources, were compiled . Economic and fiscal benefits
linked with both construction and operation of the proposed lines were considered. are
referenced to the
economic impact analysis o
economic and fiscal benefits in a matri
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" - -project/recent- .
# -
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Gas report
% - An Analysis for
& AGDC responds Alaska Dispatch.
Comparison of Current Alaska Gas Pipeline Proposals 1

4. Alaska Pipeline Project
is a project headed by roject
-mile, -inch diameter pipeline with
from Prudhoe Bay
- laska-
bor -
inch diameter pipeline in
Prudhoe Bay. A on the pip within Alaska for in-
connect to
option to route the pipeline from Prudhoe Bay
the
this time, the companies are
Alaska
ALASKA GASLINE INDUCEMENT ACT
the Alaska Gasline Inducement Act (AGIA)
-
million in pre-
establis
was determined to be the only application
All Alaska Gas Pipeline
the Fairbanks
(
- -inch diameter
plans include -state consumpt
markets. - -state consumption.
.
whether or not both parties or an arbitrator determines the project is uneconomic, tate to
I , for a period
-of-way
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'
( statute:
Comparison of Current Alaska Gas Pipeline Proposals

5. from th and a ) has noted that
prior -of-way and permits will shorten the timeline.
Alaska Stand Alone Pipeline
(AGDC) corporation, a
, and construction of a
-inch (the so-called “bullet line”) -mile pipeline, called the Alaska
would run from Prudhoe Bay to Cook Inlet
cubic feet per day (mcf/d), with potential to add capacity with compression at a later date. In order to comply
capacity. Off-takes
-state
consumption
may .* -of-
-diameter
-
th , construction of a small-
-
in order to fulfill initial contracts, a pipeline PP, will need to s
of the Prudhoe Bay fields
projected -year life of
peline.
and fields.
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)
*
!+
Comparison of Current Alaska Gas Pipeline Proposals

6. Comparison of Gasline Proposals
Alaska public sector i line centers on creation of a stable and more affordable
is predicted to
( )
re
!! !" A report for the Office of the Federal Coordinator for Alaska
(OFC) as the
-
!#
tate to
' shift in tate
Gas for Alaska Communities
and electricity prices, especially in rural areas, are often inordinately
Bethel diesel) costs to
. !$ !%
. Whether or not this
n
a recent
assessment identified more . !& AGDC states that
a “
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y Open- –
.
!" AGPA, “ -
termin .”
!#
!$ -
(Medium Case).
!% .
!& -
Comparison of Current Alaska Gas Pipeline Proposals 4

7. !( When current supp
is intended to
also off-
dedicated to in-state consumption -take points, AGPA intends to
Alaska communities and military bases that may be reached by pipeline,
!) by the Alaska Gasline Inducement Act (AGIA) to
-takes for in- -take
locations for the APP include ea/
!*
PROJECTED PRICES
and Alone Pipeline project proposal includes
Fairbanks to an un- ($
inflation). un-
- onsumers than a smaller-
diameter line because of lower tariffs. "+
$4.19/MMBtu for predicted
/MMBtu for the APP. "! -up of the
All Alaska Gas Pip . ""
A base case model in the same study predicts that natural
"#
State Revenues
to comprise 91 percent of Alaska’s total annual unrestricted
-
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!( AGDC Alaska Dispatch.
!)
!* In-
"+'White, Bill. . Office of the Federal Coordinator
. .
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Comparison of Current Alaska Gas Pipeline Proposals

8. state at some time in the future
years or more.
OFC, the APP wou
-year life).
a total of
Project Costs
- -diameter pipelines, projected construction costs for the
“bullet line” would be lower than for the others
-point of
and the AGPA proposa to $
Project Ownership
Job Creation
that will r
considerable
-
Indirect employment estimates f -
It has recently been noted that construction of
Oil Pipeline created , and total, jobs. ")
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"( -
") -
Alaska.
Comparison of Current Alaska Gas Pipeline Proposals

9. to support project
Markets
- -
of-
-
-of- -state consumption.
"*
#+
Next Steps
ALL ALASKA GAS PIPELINE
the port authority
AGIA that r
by the Harris Group predicted
ALASKA PIPELINE PROJECT
. As of
from
two years.
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Comparison of Current Alaska Gas Pipeline Proposals

10. ALASKA STAND ALONE PIPELINE
o
decided by the session.
r the project should be publicly owned (as recommended by AGDC).
Comparison of Current Alaska Gas Pipeline Proposals

11. COMPARISON of CURRENT ALASKA GASLINE PROPOSALS
Alaska Gasline Project Proposals
Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP)
(ASAP)
“bullet line”
(non-AGIA) (AGIA) (AGIA-compliant)
Alaska Gasline Port Authority TransCanada Alaska Gasline Development
Sponsor
Corporation (AGDC)
Project Team or Port authority members: Fairbanks North TransCanada and ExxonMobil AGDC formed by Alaska
Partners subsidiary corporation of
Finance Corporation to plan, construct,
and finance the project
Proposed Route Prudhoe Bay- Two alternative routes:
Prudhoe Bay-Fairbanks-Delta Junction,
Parallel to TAPS south
1. Alberta option. Delta Junction- Near Nenana south
Whitehorse-Boundary Lake
(BC/AB). Generally follows
Alaska Hwy to AK/Yukon border.
This option is the only one Lake
currently pursued.
2. Junction-
f
(offered in
2010 open
Alberta option). Current focus is
on Alberta option.
Additional transmission line from the
Point Thomson field to the Prudhoe Bay
Comparison of Current Alaska Gas Pipeline Proposals 9

12. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
Proposed Lateral/Off- Required to provide at least 5 taps for in- Fairbanks Lateral: 35 miles, 12-inch
takes approximately 125 miles. Proposed 18 state consumption. Points likely to diameter, 60 MMscfd capacity
locations for off-takes dedicated to in- include Parks
(spur lines need to be (alternative to Delta
constructed by AK, other Junction), Delta Junction/Richardson
or private parties) Source: AGPA 2007 AGIA application. , and Tok.
Source: TransCanada open season document
to FERC, 2010.
Other proposed Gas treatment plant at Prudhoe Bay
facilities Bay
Two compressor stations
Liquefaction/Fractionation plant,
Gas take-off facility near Dunbar
Operation/maintenance centers in
Wasilla, Fairbanks, Prudhoe Bay
NGL extraction plant at pipeline
terminus
Length 806 miles Alberta option: 1,717 miles (745 in AK) 737 miles
Point l 58 miles
Diameter 48 inches 48 inches 24 inches
Point Thomson section: 32 inches
Pipeline capacity: 3 bcf/d (5.9 bcf/d Alberta option: 4.5 bcf/d (5.9 bcf/d 500 mcf/d –
Capacity
w/max. compression) w/max. compression)
Alaska Gasline Inducement Act (AGIA)).
LNG plant capacity: 2.7 bcf/d additional
added at a Possibility for future additional capacity
capacity of .9 bcf/d per train) Point Thomson section: 1.1 billion scf/d with compression.
Comparison of Current Alaska Gas Pipeline Proposals 10

13. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
$20- Alberta option: $32 - $41 billion $5.3 - $9.8 billion ($7.52 billion as
Estimated Cost
a
-$26 billion
Source: Alaska Pipeline Project website and Source: Alaska Pipeline Project website and
Source: ASAP Project Plan. July 2011. 2011
TransCanada request for open season OFC. TransCanada request for open season
dollars.
document. 2009 dollars. OFC. document. 2009 dollars.
Proposed Ownership Owner: State of Alaska TransCanada/ExxonMobil Ownership models before l :
- State of Alaska own and private
Operator option: Private sector developer builds and operates (lowest
(TransCanada or others) tariff of the ASAP options:
and lower cost of debt, requires
. AGDC
Builder: private sector recommends this model.
- Public-private ownership
- Private builder/owner/operator
Source: ASAP Project Plan. July 2011.
Adjusted tariff to Fairbanks approximately $2.43—$3.13/MMBtu GTP to Alberta
Estimated Tariff
$1.15/million BTU. nominal tariff) is $7.75/MMBtu.
$2.22—
(incl.
Source: Alaska Gas Pipeline Project Office.
2009 dollars. Source: ASAP Project Plan July 2011.
Source: Harris Group report
Asia plus in-state consumption. AGPA Gas to Fairbanks and Cook Inlet areas.
Proposed Markets
anticipates the ability to provide at Boundary Lake to supply Alberta and Other Alaska communities as feasible.
all communities in Alaska accessible by Lower 48 -state to a variety
Rim (approximately half of supply).
within Alaska.
Source: ASAP Project Plan. July 2011.
Comparison of Current Alaska Gas Pipeline Proposals 11

14. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
Anticipated Jobs 6,000+ Alaska jobs pipeline construction
6,500 -
construction (plus an estimated 2,700 –
the LNG facility). It has recently been
noted that construction of the Trans
Alaska Oil Pipeline created 21,000
construction and 70,000 total jobs.
50,000+ indirect
Source:
2007, 2008 an ,
Source: Alaska Department of Labor and
Superior Court for the State of AK. Workforce Development (DOLWD)
A similar LNG facility in Lake Charles, Direct, indirect, induced jobs for pipeline
Louisiana estimates indirect employment plus potential expansions:
of over 100,000 new jobs over 20 years.
Another project, the Dominion Cove 250,000 to 303,000 U.S. jobs
Point LNG facility in Maryland, estimates
337,000 job-years (direct, indirect,
induced) over a 23- Source: Alaska Gasline Project Office website.
period. The Dominion Cove project
estimates between 2,700 and 3,400 jobs
Source: Alaska Stand Alone Gas Pipeline/ASAP
Neither of these comparable projects -
includes a pipeline. of-Way Lease. 3/11.
Source: AGPA website, estimate based on BG
Lake Charles facility in LA and Dominion Cove
facility in MD (EIS of Construction and
Operations for application to the DOE for
export of LNG Oct. 3, 2011).
Timeline to Production 2018-2021 2020/2021 Late 2018/2019
Comparison of Current Alaska Gas Pipeline Proposals 12

15. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
“ “The project would not spark as much
More Oil in TAPS?
it to
market.”
Source: All-Alaska Gasline website
“
transport and markets for both --
Source: ADN July 30, 2011
“
-
pipeline.”
Source: OFC
-A, USGS provides “new economic analysis of the reserve,
”
Source: ADN May 10, 2011
“The
in-
exploration for new reserves.”
Source: OFC
Comparison of Current Alaska Gas Pipeline Proposals 13

16. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
Projected Revenue for $3 billion-first year Total Annual Public Revenues: $3.75 billion to $4.57 billion in direct
State of Alaska (from nominal revenues from State royalties,
royalties, production tax, $2.3 billion per year property taxes, and income tax over the
property tax and first 20 years of the project. In the
corporate income tax) Up to $24 billion in Year 30. - Annual royalty: $527 million (at state/public ownership model only property
least 25% to Permanent Fund) taxes will be paid, not income (as payments-
$75-$419 billion in total State revenues in-lieu-of -taxes).
over a 30-year life - Annual production tax: $901
million
- Property tax: $1.1 billion.
Annual $622 million
- State corporate income tax year
one: $283 million (“simplistic
estimate”)
. The
Source: Liquefied Natural Gas (LNG) Project Denali project included in this report has been Source:
Comparison discontinued since publication because of a
2011 for AGPA. lack of customer commitments.
Requires industrial anchor for full
Other important project capacity: “a consumer or exporter of
elements
-term portion of the
capacity with minimal seasonal variation
above the residential, commercial, and
pipeline”
- ASAP Project Plan. July 2011.
Comparison of Current Alaska Gas Pipeline Proposals 14

17. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
Approximate Current - $8.85/MMBtu
AK Consumer Costs
Fairbanks - $23.35/MMBtu
Source: ASAP Project Plan. July 2011.
Bethel – $40/MMBtu (diesel)
Predicted Energy Prices Fairbanks - $5.29/MMBtu wholesale Predicted Fairbanks off-take price as low Un-inflated 2011 consumer cost
-off as $4.19/MMBtu - $9.63/MMBtu. (Inflated
(for Alaska consumers (compared to a predicted diesel fuel cost to 2021: $12.21/MMBtu).
wholesale cost of $27.23 per million BTU Predicted Cook Inlet price for in-state
unless otherwise noted)
in 2021). Un-inflated 2011 consumer cost
NS wellhead price): $5.95/MMBtu for Fairbanks $10.45/MMBtu (Inflated cost
Bethel - $25.31/MMBtu in 2021 spur off Alberta line at Delta Junction. to 2021: $13.25/MMBtu).
(predicted diesel retail price of This price predicts an approximate 33
$52/MMBtu in percent reduction in Cook Inlet natural
medium case model. These predicted
prices represent an approximate 50
y price for
Bethel.
Predicted Cook Inlet price for in-state
NS wellhead price): $5.70/MMBtu for
spur line from Glennallen. Source: (Cook Inlet).
Source: ASAP Project Plan. July 2011,
Source: Harris Group study 11/11, ISER, ANGDA 9/12/11. Inflation rate estimate based
Alaska consumers.
Comparison of Current Alaska Gas Pipeline Proposals 15

18. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
Support/Licenses 1999 – Alaska voters created AGPA to 2008 - Sole recipient of license under Granted un- -of-way lease
the 2007 Alaska Gasline Inducement by DNR (first un-conditional pipeline
Act (AGIA)
2002 - created the Alaska
Natural Gas Development Authority Up to $500 million in pre-construction
(ANGDA) to “ subsidies available from the State of
pipeline from Prudhoe Bay to Alaska. The state is under contract
tidewater on Prince William Sound (AGIA) for up to $500 million of
and a spur l stribution reimbursable expenses
AK.”
2005 - AGPA acquired, for a period of
time that has now expired, an option
to purchase the Yukon Pacific
-
of-way for a NS-
and LNG plant. AGPA:
-of-
way and permits will shorten the
project development timeline.
Source: AGPA AGIA License Application 11/07.
In n line customers 2011-2015 - Project sponsor sharpens
Continue to work with Asian markets to after 2010 open season with no
Next Steps
identify customers. Continue to discuss commitments yet - need firm 20-25 year permits, and solicits customers.
commitments for (ADN
clause within AGIA with current 9/17/11). 2015-2018 - Construction and
administration, and the Alaska 8/1/11 – FERC issued intent to prepare
an EIS for the APP Alberta option.
Not
sufficient information submitted by
TransCanada
route.
Source:
Source: Bill Walker, AGPA, General
Commission (FERC) in October 2012 for Bill White. Office of the Federal Coordinator.
a certificate to construct and operate the 8/15/2011
pipeline. (FERC review about two years).
Comparison of Current Alaska Gas Pipeline Proposals 16

19. Alaska Stand Alone Gas Pipeline
All Alaska Gas Pipeline Alaska Pipeline Project (APP) (ASAP)
“bullet line”
(General From AGIA: From ASAP Project Plan. July 2011:
Other Comments
of AGPA:
“If, before the commencement of
“AGPA continues to respond to Asian commercial operations, the state -
market interest in LNG from the deep extends…preferential royalty or tax diameter pipeline open seasons do not
and work with the
timeframe that makes a spur line a viable
to exercise the clause under AGIA that project alternative to a stand-alone pipeline.
requires there to be proof of the in this state, and if the licensee is in ASAP is predicated on the uncertainty of
compliance with the requirements of the
license and …state and federal statutes considered a comparable economic
entities to measure fiscal benefits to the alternative to ASAP.”
entire State the licensee is entitled to payment from
the state of an amount equal to three
performed such an analysis and times the total amount of the
concluded that the economics of LNG expenditures incurred and paid by the
licensee that are qualified
compared to 9 other proposed LNG expenditures...” [AS 43.90.440(a)].
export projects in other parts of the
world (Australia, British Columbia, and
Lower 48).
Comparison of Current Alaska Gas Pipeline Proposals 17