arctic resources company northern gas pipeline project forrest e. hoglund
DESCRIPTION
Arctic Resources Company Northern Gas Pipeline Project Forrest E. Hoglund Chairman & Chief Executive Officer. Arctic Gas Pipeline. Most important energy project for North America – 44Tcf Two competing pipeline proposals – just like 1975 Politics make Florida in November look like kids play. - PowerPoint PPT PresentationTRANSCRIPT
Arctic Resources Company
ARC
Arctic Resources CompanyArctic Resources Company
Northern Gas Pipeline ProjectNorthern Gas Pipeline Project
Forrest E. HoglundForrest E. Hoglund
Chairman & Chief Executive OfficerChairman & Chief Executive Officer
Arctic Resources Company
ARC
Arctic Gas PipelineArctic Gas Pipeline
1. Most important energy project for North America – 44Tcf
2. Two competing pipeline proposals – just like 1975
3. Politics make Florida in November look like kids play
Arctic Resources Company
ARC
Comparison of OptionsComparison of Options
1. Two Pipeline Option – ANGTS through Alaska plus Mackenzie Valley Pipeline
2. “Over the Top Route” – Prudhoe Bay to Northern Canada and up the Mackenzie Valley to Alberta – One Pipeline
Arctic Resources Company
ARC
ANGTS & Mackenzie Delta Pipeline RoutesANGTS & Mackenzie Delta Pipeline Routes
Zama
Boundary Lake
Arctic Resources Company
ARC
ARC’s Northern Gas Pipeline RouteARC’s Northern Gas Pipeline Route
Arctic Resources Company
ARC
Economic ComparisonEconomic Comparison
2 – Line Approach Over the Top
ANGTS Mackenzie Total Northern
Route
Capital Construction Cost ($ Billion): 10.0 + 3.5 = 13.5 7.8
Capacity (after ramp up) (BCFD): 4.0 + 1.2 = 5.2 5.2
Length to Edmonton, AB (± Miles): 2,140 + 1,350 = 3,490 1,700
Mountains to Cross (± Miles): 900 + 0 = 900 0
Wellhead Netback (Mcf): $0 to $0.20 $0 to $0.10 $0.75 to
$0.90
(at $2.50/Mcf into Chicago)
Arctic Resources Company
ARC
PoliticsPolitics
Alaska Aggressively Supports 2 Pipeline Approach
• Jobs, gas for Alaska, state pride
• Passed State Law prohibiting the “Over the Top” pipeline route
• Passed ban on “Over the Top” in House Energy Bill
• May try same effort in Senate
Arctic Resources Company
ARC
Problems with Alaskan ApproachProblems with Alaskan Approach
• ANGTS route uneconomic today w/o large subsidies
• Result will be to make reserves low to no value and may cause stalemate like in 1975
• State makes $100 mm plus per year more with “Over the Top” route
• Two pipeline approach causes conflict between U.S. and Canada
• Alaska actions are a direct challenge to Canada, ANGTS can lower value of Canadian reserves
Arctic Resources Company
ARC
Canadian ImplicationsCanadian Implications
• Canada strongly interested in an economic route – Over the Top
• Alaskan moves seen as threatening
• Canada will have major say where pipeline goes – NEB hearings
• Canada and U.S. interests are clearly aligned – one economic project
Arctic Resources Company
ARC
Arctic Resources ApproachArctic Resources ApproachLowest Tariff – Fewest ObstaclesLowest Tariff – Fewest Obstacles
1. Best route – Best economics
2. Significant Aboriginal involvement
− 100% Ownership
− ARC is Program Manager
3. 100% Debt Financing
4. Consortium runs project
Arctic Resources Company
ARC
ARC ApproachARC Approach
1. Obtain Aboriginal support
2. Canadian Aboriginal and Alaskan Municipal Entity files project with respective Canadian and U.S. regulatory authorities
3. U.S. and Canada come together on what the best project is
4. Major companies finally back most economic route
5. Consortium fully formed to carry project forward