(AlbertaIndex, April 15, Tuesday) --- In the largest private sector construction project undertaken in North America, BP and ConocoPhillips have begun work on jointly building the Denali–Alaska pipeline to deliver approximately four billion cubic feet of natural gas per day to markets in North America.

    BP and ConocoPhillips plan to spend US$600 million to reach the first major project milestone, an open season to start up before 2010.

The project consists of a gas treatment plant on Alaska’s North Slope and a large-diameter pipeline that travels over 700 miles through Alaska, and then into Canada through the Yukon Territory and British Columbia to Alberta.

If gas has to be transported from Alberta, the project will include a large diameter pipeline from Alberta to the Lower 48 states. BP and ConocoPhillips will seek other equity partners, including pipeline companies, who can add value to the project and help manage the risks involved.

The companies already have assigned staff to the joint project team which will be ramping up over the coming months. A new project headquarters in Anchorage will be identified and a new company formed to manage the project. ConocoPhillips’ previously announced intent to conduct summer field work in Alaska will be rolled into the joint effort.

Following a successful open season, a process during which the pipeline company seeks customers to make long-term firm transportation commitments to the project, the companies said they intend to obtain Federal Energy Regulatory Commission (FERC) and National Energy Board (NEB) certification and move forward with project construction. The FERC and NEB certificates are the critical permits that provide government authorization to construct a pipeline.

“This project is vital for North American energy consumers and for the future of the Alaska oil and gas industry. It will allow us to keep our North Slope fields in production for another 50 years,” said Tony Hayward, BP group chief executive. “The Alaska gas pipeline will be an historic project and we are pleased to be working with ConocoPhillips to move it forward.”

“Our goal of bringing Alaska’s North Slope gas to market is becoming a reality. Denali– Alaska gas pipeline project will deliver natural gas to meet North America’s growing energy needs,” said Jim Mulva, ConocoPhillips chairman and CEO.

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