PUBLISHED: 4:37 PM on Wednesday, July 2, 2008
Denali company formed; BP manager named president
Veteran Alaska BP manager Bud Fackrell was named to head the new Denali gas pipeline project. Parent companies BP and ConocoPhillips named Fackrell as president June 12.

Fackrell will supervise efforts by the new company, Alaska Gas Pipeline LLC, in preliminary engineering and environmental work on a proposed $30 billion-plus North Slope gas pipeline.

The new company was formally organized in the days prior to Fackrell's appointment, BP spokesman Steve Rinehart said.

The company's initial efforts are to prepare for an open season to seek commitments of gas capacity for the Denali project in 2010. BP and ConocoPhillips said earlier they will spend $600 million preparing for the open season.

Fackrell's appointment to lead the pipeline company is considered a significant step in the organization of the senior management team of the company, which is expected to consist of senior BP and ConocoPhillips personnel with Alaska experience.

"We're still forming our executive team. The first piece of business was to appoint me. We have a number of good candidates for the senior management team," Fackrell said.

Fackrell was previously responsible for all of BP's North Slope-producing assets except the Prudhoe Bay field, and prior to that managed major oil and gas projects in the Persian Gulf.

In a separate development, the state of Alaska is proposing to issue a license for a pipeline project to a Canadian pipeline company, TransCanada Corp., that would grant the pipeline company $500 million in state funds to prepare to tackle a similar project in competition with the BP and ConocoPhillips Denali pipeline. Alaska's state Legislature is now meeting in special session to consider the license.

Fackrell said the Denali pipeline group will have its own offices separate from the owners' companies. A search is on now for suitable office space in Anchorage and decisions on leasing have not yet been made, Fackrell said. There are now about 100 people at work on the project, including 50 doing field work through contractors. By the end of the year there will be 150 on Denali's staff, Fackrell said.

On June 19 the company was scheduled to open a field office in Tok to aid coordination of contractors' activities, Fackrell said. Most of the 2008 summer field work is focuses on gathering data on segments of the proposed pipeline from Delta to the Canada border, he said. BP and ConocoPhillips have substantial information on the Delta-to-Fairbanks segment, as well as Fairbanks to the North Slope through their ownership of the Trans-Alaska Pipeline System, which follows those routes. The two companies also have data from conceptual engineering studies of an Alaska Highway gas pipeline done in 2001.

"A lot of the information from the 2001 studies can be used but things that relate to surface lands can change. Our task this summer is to go back and fill in the gaps in that data," Fackrell said.

Most of the work will be concentrated on parts of the route from Fairbanks to the border because that is where the biggest gaps are, he said. Tok, and the field office there, will be the center of the activity.

"We plan to spend $40 million this summer on our field programs. That's a significant effort," Fackrell said.

The work aims to gather information for designs and cost-estimates for an open season planned for 2010, he said. An open season is held when a pipeline developed solicits proposals to purchase capacity in a proposed pipeline. To secure contracts to ship gas, the pipeline company must have high-quality cost estimates to build the pipeline and estimates for tariffs, or shipping fees.

Fackrell will soon have three project teams reporting to him: One for a major treatment plant that will be needed on the North Slope, a second team for the pipeline built from Prudhoe Bay to Alberta, and a third team for a possible new pipeline built from Alberta to the continental U.S.

The Denali project will also consider using existing pipelines in Alberta to send Alaska gas on to the Lower 48 in addition to the possible new pipeline. The decision will be made on which alternate offers the most cost-efficient way to ship gas through to final customers in the continental U.S.

Tim Bradner can be reached at