newsminer.com

Denali - The Alaska Gas Pipeline LLC announced a contract with engineering firm Bechtel.

This is the second major contract Denali has announced in recent months. The BP-ConocoPhillips joint venture is proposing a large-diameter natural gas pipeline between Alaska's North Slope and markets Outside. The line would ship four billion cubic feet of has per day, about the same amount as a line proposed by TransCanada and supported with a license from the state under the Alaska Gasline Inducement Act.

TransCanada won the license and $500 million in state funds to reimburse costs incurred pursuing a federal license. BP and ConocoPhillips, both North Slope producers with gas of their own to ship, announced their Denali project after TC received the state license.

According to a press release, the contract will cover preliminary engineering design phase of the mainline, including pipeline and compressor station engineering, cost estimates and procurement planning.

Bechtel's work product will be used by Denali in developing commercial terms for a 2010 open season.

During an open season, a developer lays out for producers the fiscal details of shipping gas, and hopes for commitments to buy space in the line. That, in turn, helps a builder secure financing which smooths the way for a license from the Federal Energy Regulatory Commission.

The "main line" includes the pipeline and compressor stations between the North Slope and Alberta hubs.