Mar. 27--TransCanada Corp. has awarded a contract to URS Corp. to develop a preliminary feasibility and engineering study for a multi-billion dollar gas treatment plant that would be part of an Alaska natural gas pipeline project the company hopes to develop, TransCanada vice president Tony Palmer said.

Arctic Slope Energy Services, a subsidiary of Arctic Slope Regional Corp., will provide engineering services to URS on the contract, he said.

Palmer said the engineering and design work, as well as cost estimates for the gas plant, would be combined with other engineering and environmental work TransCanada is doing to develop overall cost estimates for its project.

Cost estimates are needed for an open season planned in 2010 in which the pipeline company will solicit customers to ship gas on its pipeline. The URS and ASRC Energy work is due to be complete in early 2010, Palmer said.

Both companies are active in Alaska, and maintain offices in Anchorage. The gas treatment plant will process raw natural gas produced from North Slope fields to remove carbon dioxide, water and impurities from the gas, preparing it for the gas pipeline.

TransCanada's competitor Denali Group has also awarded a contract for engineering studies and cost estimates for a gas treatment plant. That contract was awarded Feb. 10 to Fluor WorleyParsons Arctic Solution, a joint venture with WorleyParsons and Fluor, with CH2M-Hill acting as subcontractor. Denali also plans an open season for its project in 2010.

TransCanada's project is supported by the state under Gov. Sarah Palin's Alaska Gasline Inducement Act. The company plans a 48-inch pipeline built from the North Slope through Interior Alaska to Alberta, Canada, where Alaska gas would connect to TransCanada's existing pipeline network.

Denali's project would follow a similar route, except that the company will consider the option of building a new pipeline from Alberta on to the U.S. Midwest.

Palmer said TransCanada would prefer not to build and own the gas treatment plant, leaving this to another party. However, the cost of building the plant must be estimated now so that it can be included in the total cost for moving gas from the North Slope that TransCanada will present to potential customers next year.

Palmer said TransCanada continues to have confidence in the pipeline plan despite recent economic difficulties.

The project would not go into service until 2018 and would operate for 50 years or more, he told a state legislative committee in Juneau March 19.

There are bound to be periods of price slumps and rises during such a long period of operation, and companies involved in large projects plan for them, he told the House Energy Committee.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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