Thesis (M.S.) University of Alaska Fairbanks, 2003This work describes the price risk involved in developing an Alaska Natural Gas Pipeline. Three alternatives were developed. They are an ALCAN Only 4.5 Bcf/day case, a Y-line case, and an ALCAN Only 5.5 Bcf/day case. The simulation result supports the conclusion that the ALCAN Only 4.5 Bcf/day case would be the most feasible and flexible choice for the long-run gas development with less commodity risk. Also, the price credit simulation was run based on the EIA natural gas price forecast. It shows how a Federal Tax Credit helps to reduce price risk making this marginal project more acceptable for participating oil companies. However it might not be revenue neutral for the Federal Government. The risk-assessment model was constructed in the Excel spreadsheet with a commercially purchased add-in feature (@RISK by Palisade Corp.) that performed the Monte Carlo simulation and the probabilistic outcomes. It was designed to be a dynamic tool that could estimate production performance with associated costs, and product prices to Yield an economic analysis. The model was specifically designed for the Alaska Natural Gas Pipeline. This work could be useful for government, companies, and any individual, who is currently involved with the Alaska Natural Gas Act
