Society of Petroleum Engineers

ASAP Project Overview

January 9, 2014

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Today’s Presentation

Alaska Gasline Development Corporation Enabling Legislation – HB4 Alaska Stand Alone Gas Pipeline Project Scope Line Pipe Material Work Plan

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ASAP — The In-state Pipeline Project

April 2010: HB 369 mandated that Alaska Housing Finance Corporation (AHFC) facilitate development of a plan for an in-state pipeline project.

July 2010: AHFC established the Alaska Gasline Development Corporation (AGDC) as a subsidiary corporation to take over project planning and execution.

ASAP is that project: the Alaska Stand Alone Pipeline. Also known as the in-state pipeline.

April 2013: HB 4 mandates AGDC to advance an in-state gas pipeline from North Slope to Fairbanks and Southcentral to an open season and sanction.

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Alaska’s Energy Situation

North Slope energy rich 30+ Trillion cubic feet of

natural gas Cook Inlet Basin in decline

Creating uncertainty as early as 2018

Cost of residential heat Fairbanks heating oil

~$30/MMBTU Cook Inlet natural gas $9 -

$10/MMBTU

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2013 Legislative Action – AGDC & HB4

Authorizes AGDC to construct gas pipeline from Prudhoe Bay to Fairbanks and Southcentral Alaska

Established a new public corporation Authorizes AGDC to work on ASAP plus other projects, issue bonds, and

determine ownership model Established a 7-member Board of Directors Authorizes AGDC to issue revenue bonds Creates new regulatory framework for contract carriers Requires all state departments, agencies, and public corporations to

work expeditiously with AGDC on permits and authorizations Provided $355 million in 2013 to advance the ASAP project to open

season and sanction

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Cook Inlet Basin Production Forecast

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ASAP Project Scope

Mainline 36” diameter pipe 737 miles long 1,480 psi max operating

pressureFairbanks Lateral

12” diameter pipe 35 miles long Tie-in w/mainline at MP 458

500 Mmscf/day – AGIA limit North Slope Gas Conditioning

Facility (GCF) at Prudhoe Bay More off-takes possible

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Stage Gate Approach

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ASAP Work Underway Preparing for new AGDC

organizational structure Project Execution Plans First board meeting held

October 30, 2013

Program Management

Contractor (PMC) on board 2013 major work activities

Advancing FEL-2 (Pre-FEED) facilities and pipeline engineering– Open season management contractor selected– Construction planning and logistics – Regulatory engagement

– PHMSA special permit

– 2013 winter field programs

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Field Program Continues Winter 2013-14

Hundreds of geotechnical boreholes from Yukon River to Point Mackenzie

Geohazard investigation Stream crossing surveys Air monitoring: 18-month duration Terrain unit mapping Cultural resource surveys Routing surveys

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Preliminary Design – Phase I Tasks

Task 1 – Geothermal Methodology

Task 2 – Initial Frost Heave Analysis

Task 3 – Geo-database Development

Task 4 – Field Program Development

Task 5 – Line Pipe Materials Research

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Design Approach Flowchart

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Line Pipe Materials Research

Research material specifications for arctic applications

Develop schedule for line pipe material development

Identify and contact potential suppliers and review Line Pipe requirements

Acquire material samples for small-scale testing

Complete small-scale material tests

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ASAP System Schematic

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Gas ProcessingNorth Slope Gas Conditioning Facility

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ASAP - Composition

Component Mole %

Methane (C1) 88.75

Ethane (C2) 5.93

Propane (C3) 1.83

i-Butane (i-C4) 0.09

n-Butane (n-C4) 0.14

Pentanes+(C5+) 0.07

Carbon Dioxide (CO2) 2.50

Nitrogen (N2) 0.69

Hydrogen Sulfide (H2S) 0.00

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ASAP – Pipeline Pressure Profile

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ASAP – Pipeline Temperature Profile

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ASAP – Pipeline Materials

Design Parameter ASAP Mainline Fairbanks Lateral

Nominal Pipeline Diameter 36 inches 12 inches

Maximum Allowable Operating Pressure

1,480 psig 1,480 psig

Yield Strength (SMYS) 70.0 ksi 52.0 ksiPipe Specifications API 5L PSL2 API 5L PSL2Manufacturing Process DSAW DSAW or HFERWMaximum Operating Temperature

60F 60F

Minimum Design Temperatures(for ductility analyses)

–50F for Aboveground0F for Buried 0F

Wall Thickness, Weight per Foot

Location Class 1 F = 0.72 0.527 inches, 199.4 lb/ft 0.330 inches, 43.7 lb/ft

Location Class 2 F = 0.60 0.632 inches, 238.5 lb/ft 0.330 inches, 43.7 lb/ft

Location Class 3 F = 0.50 0.758 inches, 285.0 lb/ft 0.330 inches, 43.7 lb/ft

Location Class 4 F = 0.40 0.947 inches, 354.5 lb/ft 0.375 inches, 49.5 lb/ft

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ASAP –Arctic Geohazards

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Maximum Curvature vs. Time

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ASAP –Planned Material Tests

• Working with Potential Material Vendors• Expecting Pipe to be Tested by Summer• Planning both small scale and full scale

tests• Small scale tests to fully identify material

inputs to project predictive models• Full scale tests to validate the project

predictions

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Typical Pipeline Construction

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Almost entirely buried except:North SlopeFault CrossingsSome Major waterways

Mainline

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Scale of Construction Activities

Considerable construction workforceOver 8,000 direct jobsOver 15,000 indirect jobs

335,000 tons of steel for the pipeline 9,000 truckloads of pipe travelling

4 million miles 10 million cubic yards of earthwork 15 construction camps 6 construction spreads 3 years to construct – winter and summer construction

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ASAP Schedule

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ASAP Cost to Consumers

Heating Cost Comparison

Fairbanks Now Fairbanks ASAP Estimate

Natural Gas - $23.35 Natural Gas - $8.25-$10

Diesel - $30.00

Anchorage Now Anchorage ASAP Estimate

Natural Gas - $9.65 Natural Gas - $9 - $11.25

Price listed per 1 MMBtu’s (1,000,000 btu’s) in 2012 dollars. Estimated cost of gas to consumers at the burner tip.

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Questions?

Alaska Gasline Development Corporation3201 C Street, Suite 200Anchorage, Alaska 99503

(907) 330-6300www.agdc.us

Frank Richards, P.E. ASAP Pipeline Engineering Director

Keith Meyer, P.E., Ph.D.ASAP Pipeline Engineering Manager