Abstract
Abstract This paper presents a historical analysis of plans proposed by the private sector to develop and commercialize the natural gas resources found on the North Slope of Alaska. It evaluates current proposals to commercialize North Slope gas and discusses the potential economic benefits to be derived from gas commercialization. First, we describe the natural gas resources of the North Slope. Second, a resource-allocation optimization model is presented to evaluate quantitatively the options available for gas utilization. The model is applied to the North Slope to screen the various gas utilization alternatives and to recommend the economically feasible options. The optimal decision is a major gas (LNG) sale to the Pacific Rim countries. The LNG project involves conditioning natural gas on the North Slope and transporting the gas by pipeline from Prudhoe Bay to a tidewater port where it can be liquefied and shipped by tankers to the Pacific Rim markets. Introduction The North Slope of Alaska is endowed with vast amounts of natural gas resources. Estimates of proven natural gas reserves remaining on the North Slope are in the range of 30 - 39 trillion standard cubic feet (TCF)(ADNR, 1996; AOGCC, 1995; USGS, 1995). Potential gas reserves of 14.6 TCF are estimated in the National Petroleum Reserve Alaska (NPRA) alone, with some additional 31.3 TCF of gas that could be recovered from the Arctic National Wildlife Refuge. The definitions of reserves and resources are given in the Appendix. Throughout the 1970s, a number of proposals and studies were made to bring the North Slope natural gas to market. In the early 1950s, the Alaska Natural Gas Transportation System which had been supported by the Carter Administration floundered due to lack of private or public financing. For the past ten years gas production on the North Slope has risen from 2.5 billion to over 7.5 billion cubic feet per day [AOGCC, 1995]. Multibillion dollar gas handling facilities have been built by the operating companies to process the huge volumes of gas produced from the North Slope fields. At present the North Slope natural gas has no market and it is being processed primarily for reinjection into the formation to maintain reservoir pressure. A small fraction of the gas is converted into natural gas liquids (NGLs) and blended with the crude oil for shipment via TAPS (Trans-Alaska Pipeline System). The North slope gas is also used to manufacture miscible injection fluids for enhanced oil recovery (EOR) operations. In this paper we describe the natural gas resources of the North Slope of Alaska. Past and current proposals to develop and commercialize the gas resources are analyzed in order to recommend the optimum resource development plan. The gas utilization analysis is conducted using a constrained, resource-allocation optimization model developed by Lannom et al (1996). The paper presents the economic benefits to be derived from various gas utilization options. The results of this study should serve as guidelines for making decisions concerning the development of Alaska North Slope natural gas. Overview of North Slope Hydrocarbon Resources The North Slope is by far the dominant oil and gas producing region in Alaska. This region covers approximately 65,000 square miles and includes the National Petroleum Reserve—Alaska (NPRA) and the Arctic National Wildlife Refuge (ANWR). P. 623
Published Version
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