Pipeline Construction Projects
       Hybrid   air   vehicles   could   have   a   valuable   role   in   many   construction   projects,   but   pipeline projects   are   particularly   interesting.   The   construction   is   spread   out   over   thousands   of   miles and   an   immense   volume   of   pipe   and   other   materials   has   to   be   transported   through   areas   with minimal   infrastructure.   There   are   at   least   four   major   pipeline   projects   planned   for   Canada   and the north as of December 2005. They include:
      Mackenzie Valley Pipeline (gas) - $7 billion
      Alaska Pipeline (gas) - $13 billion
      Gateway Pipeline (oil) - $2.5 billion
      Keystone Pipeline (oil) - $2.0 billion
Logistics Challenges Relating to Northern Pipeline Construction
    Several   transportation   related   challenges   face   the   developers   of   northern   pipelines   for   which hybrid air vehicle are ideally suited:
       Soft   and   sensitive   ground   conditions   limit   construction   to   a   short   winter   season   where conditions   of   cold   and   darkness   are   at   their   harshest.   This   creates   a   massive   logistics   challenge because    the    entire    requirements    for    pipe,    construction    material,    camps,    equipment    and personnel   must   be   mustered   to   the   northern   sites   during   the   off-season   so   that   everything   is available for the short construction season
   There   is   significant   stress   placed   on   the   existing   infrastructure   of   roads,   rail   and   barges. Given   the   high   peaking   demands   of   the   construction   season,   planners   must   decide   whether   to upgrade   existing   infrastructure   that   will   then   be   overbuilt   for   ongoing   requirements,   or   risk congestion and the related costs.
    Project    risk    and    cost    is    significantly    different    for    northern    projects    because    of    the uncertainties   of   weather,   local   ground   conditions   and   the   distance   that   these   construction   sites are   from   their   supply   points.   Unforeseen   upsets   can   scuttle   the   construction   schedule   thus causing   a   delay   of   not   a   few   months   but   a   whole   year.   The   interest   costs   and   opportunity   costs associated with these types of catastrophic delays compound the project risk and costs.
    Redundancy   in   equipment   and   supplies   is   necessary   to   mitigate   some   of   the   project   risk. However,   having   two   items   of   a   critical   part   or   piece   of   equipment   adds   considerably   to   the risk.
    Standby   costs   are   inevitable.   It   doesn't   make   sense   to   demobilize   the   equipment   south during    the    off-season.    However,    the    equipment    owners    must    be    given    standby    fees    to compensate for the fact that their equipment must remain idle for up to eight months per year.
    Northern   drilling,   which   is   essential   to   justifying   the   pipeline   faces   similar   seasonality.   The costs   of   drilling   a   single   exploration   well   in   the   north   can   be   as   high   as   $25   million.   Of   this amount   up   to   30%   of   the   costs   relate   to   northern   operations   and   would   not   be   incurred   in southern drilling.
    People   movement   will   also   be   a   significant   challenge.   The   Mackenzie   pipeline   is   schedule   to be   constructed   in   two   winter   seasons.   This   will   result   in   very   large   construction   crews.   These crews   will   be   housed   in   large   construction   camps   that   will   be   built   along   the   right-of-way. However,   this   means   that   on   a   daily   basis   these   crews   must   be   transported   from   the   camp   to the   construction   sites.   At   its   furthest   point   between   camps   this   will   require   a   2-hour   trip.   Again this adds to the costs and reduces the efficiency.
Mackenzie Valley Pipeline
    The   Mackenzie   Gas   Project   proposes   to   build   a   1220-kilometre   pipeline   system   along   the Mackenzie   Valley.   It   would   link   northern   natural   gas   producing   wells   to   southern   markets.   The main   Mackenzie   Valley   Pipeline   would   connect   to   an   existing   natural   gas   pipeline   system   in northwestern   Alberta.   The   natural   gas   exploration   and   development   companies   involved   in   the Mackenzie   Gas   Project   have   interests   in   three   discovered   natural   gas   fields   in   the   Mackenzie Delta   -   Taglu,   Parsons   Lake   and   Niglintgak.   Together,   they   can   supply   about   800   million   cubic feet   per   day   of   natural   gas   over   the   life   of   the   Project.   Other   companies   exploring   for   natural gas   in   the   North   are   also   interested   in   using   the   pipeline.   In   total,   as   much   as   1.2   billion   cubic feet   per   day   of   natural   gas   could   be   available   initially   to   move   through   the   Mackenzie   Valley Pipeline.   Planning,   building   and   operating   the   proposed   $7   billion   Mackenzie   Gas   Project   will take    cooperation    among    many    different    companies,    communities,    settlement    regions, regulatory agencies and governments.
Alaska Pipeline
    This   project   is   competing   with   the   Mackenzie   Valley   project   and   is   being   lead   by   the   Alaska Gas   Producers.   The   Alaska   Highway   pipeline   would   begin   at   Prudhoe   Bay,   Alaska,   parallel   the   oil pipeline   to   Fairbanks,   and   then   follow   the   Alaska   Highway   through   the   Yukon   and   northeast   B.C. and   on   into   Alberta.   The   AHPP   will   carry   gas   to   southern   markets.   Approximately   760   km,   or 30%   of   the   route,   would   be   in   the   Yukon.   The   pipe   itself   would   be   42-52   inches   in   diameter. Pipeline   capacity   would   be   2.5-5.6   billion   cubic   feet/day.   The   construction   and   operation   of   the AHPP   is   expected   to   generate   up   to   375,000   person   years.   This   project   is   estimated   to   cost   $13 billion   to   construct   and   depends   upon   permits   to   drill   in   environmentally   sensitive   areas   in Alaska.
Gateway Pipeline
       The   Gateway   Pipeline   is   being   proposed   by   Enbridge   Inc.   and   is   envisioned   to   be   a   30-inch, 400,000   barrel   per   day   pipeline   running   from   Edmonton   to   the   west   coast   of   British   Columbia, where   ships   would   take   crude   oil   and   petroleum   products   to   refineries   in   California   and   the   Far East.    Pending    regulatory    approvals,    construction    could    begin    by    2008    and    it    would    be operational   by   2009/10.   A   regulatory   application   for   the   $2.5   billion,   1,160-kilometre   (720- mile)   crude   oil   pipeline   would   have   to   be   made   in   2006   to   achieve   a   late   2009/2010   in-service date,   which   is   when   Enbridge's   Western   Canada   crude   oil   supply   forecast   indicates   that   oil sands   production   will   have   increased   to   the   level   that   access   to   a   major   new   market   will   be beneficial to producers.
Keystone Pipeline
          TransCanada   Corporation   is   proposing   a   US$1.7   billion   oil   pipeline   project   to   transport approximately   400,000   barrels   per   day   of   heavy   crude   oil   from   Alberta   to   Illinois.   Transporting oil   from   Hardisty,   Alberta   to   markets   at   Wood   River   and   Patoka,   Illinois,   the   proposed   Keystone Pipeline   would   be   about   3,000   kilometres   (1,870   miles)   in   length.   In   addition   to   new   pipeline construction,   it   would   require   the   conversion   of   1,240   kilometres   (770   miles)   of   one   of   the   lines in    TransCanada's    existing    multi-line    Alberta    and    Mainline    natural    gas    pipeline    systems    in Alberta,   Saskatchewan   and   Manitoba.   TransCanada's   other   existing   pipelines   will   continue   to transport Western Canada's natural gas to markets in Canada and the United States.
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Pipeline Construction Projects
       Hybrid   air   vehicles   could   have   a   valuable   role   in   many construction   projects,   but   pipeline   projects   are   particularly interesting.   The   construction   is   spread   out   over   thousands   of miles   and   an   immense   volume   of   pipe   and   other   materials has     to     be     transported     through     areas     with     minimal infrastructure.   There   are   at   least   four   major   pipeline   projects planned   for   Canada   and   the   north   as   of   December   2005. They include:
      Mackenzie Valley Pipeline (gas) - $7 billion
      Alaska Pipeline (gas) - $13 billion
      Gateway Pipeline (oil) - $2.5 billion
      Keystone Pipeline (oil) - $2.0 billion
Logistics Challenges Relating to Northern Pipeline Construction
      Several     transportation     related     challenges     face     the developers   of   northern   pipelines   for   which   hybrid   air   vehicle are ideally suited:
       Soft   and   sensitive   ground   conditions   limit   construction   to   a short   winter   season   where   conditions   of   cold   and   darkness are    at    their    harshest.    This    creates    a    massive    logistics challenge     because     the     entire     requirements     for     pipe, construction    material,    camps,    equipment    and    personnel must    be    mustered    to    the    northern    sites    during    the    off- season    so    that    everything    is    available    for    the    short construction season
   There     is     significant     stress     placed     on     the     existing infrastructure    of    roads,    rail    and    barges.    Given    the    high peaking   demands   of   the   construction   season,   planners   must decide   whether   to   upgrade   existing   infrastructure   that   will then     be     overbuilt     for     ongoing     requirements,     or     risk congestion and the related costs.
    Project   risk   and   cost   is   significantly   different   for   northern projects    because    of    the    uncertainties    of    weather,    local ground   conditions   and   the   distance   that   these   construction sites   are   from   their   supply   points.   Unforeseen   upsets   can scuttle   the   construction   schedule   thus   causing   a   delay   of   not a    few    months    but    a    whole    year.    The    interest    costs    and opportunity   costs   associated   with   these   types   of   catastrophic delays compound the project risk and costs.
    Redundancy   in   equipment   and   supplies   is   necessary   to mitigate   some   of   the   project   risk.   However,   having   two   items of   a   critical   part   or   piece   of   equipment   adds   considerably   to the risk.
    Standby   costs   are   inevitable.   It   doesn't   make   sense   to demobilize    the    equipment    south    during    the    off-season. However,   the   equipment   owners   must   be   given   standby   fees to   compensate   for   the   fact   that   their   equipment   must   remain idle for up to eight months per year.
    Northern    drilling,    which    is    essential    to    justifying    the pipeline    faces    similar    seasonality.    The    costs    of    drilling    a single   exploration   well   in   the   north   can   be   as   high   as   $25 million.   Of   this   amount   up   to   30%   of   the   costs   relate   to northern   operations   and   would   not   be   incurred   in   southern drilling.
    People   movement   will   also   be   a   significant   challenge.   The Mackenzie    pipeline    is    schedule    to    be    constructed    in    two winter   seasons.   This   will   result   in   very   large   construction crews.    These    crews    will    be    housed    in    large    construction camps   that   will   be   built   along   the   right-of-way.   However,   this means   that   on   a   daily   basis   these   crews   must   be   transported from   the   camp   to   the   construction   sites.   At   its   furthest   point between   camps   this   will   require   a   2-hour   trip.   Again   this adds to the costs and reduces the efficiency.
Mackenzie Valley Pipeline
     The    Mackenzie    Gas    Project    proposes    to    build    a    1220- kilometre    pipeline    system    along    the    Mackenzie    Valley.    It would   link   northern   natural   gas   producing   wells   to   southern markets.   The   main   Mackenzie   Valley   Pipeline   would   connect to   an   existing   natural   gas   pipeline   system   in   northwestern Alberta.    The    natural    gas    exploration    and    development companies    involved    in    the    Mackenzie    Gas    Project    have interests    in    three    discovered    natural    gas    fields    in    the Mackenzie    Delta    -    Taglu,    Parsons    Lake    and    Niglintgak. Together,   they   can   supply   about   800   million   cubic   feet   per day    of    natural    gas    over    the    life    of    the    Project.    Other companies   exploring   for   natural   gas   in   the   North   are   also interested   in   using   the   pipeline.   In   total,   as   much   as   1.2 billion   cubic   feet   per   day   of   natural   gas   could   be   available initially    to    move    through    the    Mackenzie    Valley    Pipeline. Planning,    building    and    operating    the    proposed    $7    billion Mackenzie   Gas   Project   will   take   cooperation   among   many different     companies,     communities,     settlement     regions, regulatory agencies and governments.
Alaska Pipeline
    This   project   is   competing   with   the   Mackenzie   Valley   project and   is   being   lead   by   the   Alaska   Gas   Producers.   The   Alaska Highway    pipeline    would    begin    at    Prudhoe    Bay,    Alaska, parallel   the   oil   pipeline   to   Fairbanks,   and   then   follow   the Alaska   Highway   through   the   Yukon   and   northeast   B.C.   and on   into   Alberta.   The   AHPP   will   carry   gas   to   southern   markets. Approximately   760   km,   or   30%   of   the   route,   would   be   in   the Yukon.   The   pipe   itself   would   be   42-52   inches   in   diameter. Pipeline   capacity   would   be   2.5-5.6   billion   cubic   feet/day.   The construction    and    operation    of    the    AHPP    is    expected    to generate    up    to    375,000    person    years.    This    project    is estimated   to   cost   $13   billion   to   construct   and   depends   upon permits to drill in environmentally sensitive areas in Alaska.
Gateway Pipeline
       The   Gateway   Pipeline   is   being   proposed   by   Enbridge   Inc. and   is   envisioned   to   be   a   30-inch,   400,000   barrel   per   day pipeline   running   from   Edmonton   to   the   west   coast   of   British Columbia,   where   ships   would   take   crude   oil   and   petroleum products   to   refineries   in   California   and   the   Far   East.   Pending regulatory   approvals,   construction   could   begin   by   2008   and it   would   be   operational   by   2009/10.   A   regulatory   application for    the    $2.5    billion,    1,160-kilometre    (720-mile)    crude    oil pipeline   would   have   to   be   made   in   2006   to   achieve   a   late 2009/2010     in-service     date,     which     is     when     Enbridge's Western   Canada   crude   oil   supply   forecast   indicates   that   oil sands   production   will   have   increased   to   the   level   that   access to a major new market will be beneficial to producers.
Keystone Pipeline
          TransCanada   Corporation   is   proposing   a   US$1.7   billion   oil pipeline   project   to   transport   approximately   400,000   barrels per    day    of    heavy    crude    oil    from    Alberta    to    Illinois. Transporting   oil   from   Hardisty,   Alberta   to   markets   at   Wood River   and   Patoka,   Illinois,   the   proposed   Keystone   Pipeline would   be   about   3,000   kilometres   (1,870   miles)   in   length.   In addition   to   new   pipeline   construction,   it   would   require   the conversion   of   1,240   kilometres   (770   miles)   of   one   of   the lines     in     TransCanada's     existing     multi-line     Alberta     and Mainline      natural      gas      pipeline      systems      in      Alberta, Saskatchewan   and   Manitoba.   TransCanada's   other   existing pipelines   will   continue   to   transport   Western   Canada's   natural gas to markets in Canada and the United States.
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